THE Department of Trade and Industry (DTI) will pour an initial funding of P1 billion next year for its new financing program dubbed as “Pondo Para sa Pagbabago at Pag-Asenso” or P3 to benefit micro entrepreneurs.
The fund, which is part of the P19 billion financing program by the Duterte administration, is aimed at neutralizing the notorious “5-6” lending scheme and to give micro vendors an alternative option wherein borrowers will be charged with a minimal interest rate of only 2.3 to 2.5 percent, much lower than the 20 percent interest rate usually collected by loan sharks.
DTI-Davao Region regional director Maria Belenda Ambi told reporters Tuesday, December 20, during the agency’s annual year-end media interface at the Pinnacle Hotel and Suites, that the budget will be sourced from the National Government and coursed through Small Business Corp. (SBC.), the sole financial institution managed by DTI.
The loans, she said, will then be channeled through microfinance institutions (MFIs) or credit cooperatives that the DTI will identify.
“With this scheme, we are eyeing to collect from borrowers daily or every 15 days. We recommend the daily collection as it is seen to be most effective. We also would want to educate the micro entrepreneurs that this program is not in a dole out system,” she said adding that borrowers will need to submit less documentary requirements for easier access to financing.
DTI said earlier that they are looking at loans that start from as low as P5,000 or P10,000 to as high as P200,000.
“With this credit scheme, we complete our assistance/support to the micro-entrepreneurs because before, micro vendors find it hard to access loans from banks and SBC as requirements required are quite big,“ she said.
At present, 97 percent of the total business profiles of the country are from micro enterprises. Asked how much the region’s target is as to the total assisted micro borrowers, Ambi said, it depends on the number of qualified conduits (coop, micro enterprise bank) and beneficiaries as the scheme is demand-driven.
“We are hoping that our micro entrepreneurs here can get bigger chunk of the P1 billion (initial) fund,” Ambi said. For 2017, DTI-Davao Region target to assist a total of 10,500 MSMEs.
For the implementation of P3, Ambi said, regional offices are set to conduct series of campaigns about the new program starting January. Also, identification of willing credit cooperative or micro enterprise banks to take part in the program.
“We target to identify at least one credit coop per province. Our fighting target for this program to be fully implemented wherein micro entrepreneurs can already borrow money is on March 2017,” she said.
