Gov't financing arm draws flak for slow disbursement of loans for MSMEs

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Metro Manila (CNN Philippines, June 10) — Lawmakers called on the government's financing arm to ramp up its loan disbursement efforts to process pending applications of micro, small, and medium enterprises (MSMEs) affected by the COVID-19 pandemic.

The Small Business Corporation, the financing arm of the Department of Trade and Industry, told congressmen on Tuesday's House inquiry that it has only approved 12 loan applications amounting to ₱1.22 million out of 10,000 potential borrowers.

House Committee on MSME Development chair Virgilio Lacson urged the agency to revisit potential "discrepancies" that led to the delay in disbursement.

The SB Corp. has initially set up a ₱1-billion loan facility for affected MSMEs under the COVID-19 Assistance to Restart Enterprises program

SB Corp. president and CEO Luna Cacanando said that at least 4,000 applications are already being processed.

"By the end of June, we're targeting the approval of 7,000 applications," she said.

“We should be able to complete the approvals within July and by August, we will have spent all our funds already," Cacanando added.

In order to accommodate 10,000 potential borrowers, funding must amount to ₱1.37 billion, which comes from the national budget.

The loanable amount under the program is ₱10,000 to ₱200,000 for a micro enterprise with an asset size of not more than ₱3 million, while small enterprises with assets not more than ₱15 million may borrow a higher amount of up to ₱500,000.

SB Corp. was also called for the tapping of rural banks in disbursing funds for small businesses and improve its information dissemination to allow more applicants into the program.

"We have to make sure that the amount is properly distributed among the loan applicants. A point person [from the SB Corp.] should coordinate with the lawmakers' offices to allow more constituents to apply in the program," said Las Piñas City Rep. Camille Villar.

The DTI previously said that the SB Corp. started accepting loan applications on May 18 as the government eased quarantine rules in Metro Manila and other parts of the country.