State-owned financing firm offers loan fund for MSMEs

CEBU, Philippines -  Government-owned financial institution, SB Corporation has financially reached out to the micro, small and busines entrepreneurs specifically in Cebu, to offer a chunk of  the P4 billion direct loan facility.

SB Corporation and the Department of Trade and Industry (DTI-7) formally signed a deal with Cebu Chamber of Commerce and Industry and PhilExport Cebu, to ease financing access for MSMEs.

SB Corporation president and chief operating officer Ma. Luna E. Cacanando led the signing of Memorandum of Agreement with the officers of the CCCI and PhilExport Cebu.

The agreement stipulates that CCCI and PhilExport are tasked to endorse possible MSME borrowers, with a target of endorsing at least 100 accounts (borrowers) within Cebu during the first year of the agreement,

SB Corporation, the financing arm of the DTI, has loaned out to 700 MSMEs all over the country under its direct financing facility in 2013. About 10 percent of the borrowers are from Cebu, By 2018, Cacanando said the agency aimsto provide fincancial support to at least 5000 MSMEs.

Under the  government definition, MSMEs are companies with capitalization of not over P100 million.

Cacanando said the loanable amount range from P2 million to P5 million. Interest rates depend on the risk factors involved in the transaction, but most interest rate hover between 6.5 percent to 16 percent.

Because the access to financing among MSMEs is one of the long overdue battlecries of the sector, Cacanando said SBCorp will focus on providing direct loans, aside from its other businesses as wholesale lending and guarantees, among others.

"We are looking for small borrowers. We are begging you to join us," she told members of the CCCI and PhilExport,-Cebu as well as other MSME players who were present during the formal MOA signing of the program.

She said this move of the government will challenge the banking institutions to implement more relaxed requirements for financial access especially to micro, small and medium entrepreneurs who do not have enough capabilities to meet the strict requiremrents of the banks.

SB Corp. envisions of becoming a leader in small enterprise development financing and small credit delivery systems nationwide. It focused on developing appropriate mix of financing products that are responsive to the needs of the country's small and medium enterprises.

Over the years, SB Corp. has evolved its product line from generic credit and credit enhancement facilities—catering to both nearly bankable SMEs and small banks in need of liquidity support—to more evolved lines that focused the financing facilities to specific products/sectors. (FREEMAN)