The Department of Trade and Industry is eyeing to help more micro, small and medium enterprises through an interest subsidy scheme using the P10 billion microfinancing fund provided by the Bayanihan 2 for the Small Business Corp.
The Bayanihan 2 allocated P10-billion fund for SB Corp., the department’s financing arm, to continue rolling out its Covid-19 Assistance to Restart Enterprises program and other lending programs as well as the interest subsidy.
“We will carve out PHP1 billion from the PHP10-billion fund to be assigned to SB Corp under Bayanihan 2 as an interest subsidy fund,” SB Corp. president and chief executive officer Ma. Luna Cacanando said.
Cacanando added that the interest subsidy fund would be used to get additional financing for its lending programs from the Land Bank of the Philippines and Development Bank of the Philippines as well as other banks that would like to participate.
“We will pay them a 5 percent per year interest rate for the amounts that we will borrow from them. Thus, the PHP1.0 billion interest can produce PHP20.0 billion in loans,” she said.
However, Cacanando noted that the five-percent interest rate is “still hypothetical at the moment” as they are still discussing it with potential partners.
In a budget hearing at the House of Representatives last week, Trade and industry Sec. Ramon Lopez said the interest fund would allow SB Corp. to implement its zero-interest loan program to more MSMEs as well as overseas Filipino workers affected by the pandemic.
The CARES program provides an interest-free loan to existing registered MSMEs and beneficiaries only pay a six-percent service charge and are given a six-month grace period before starting their loan payment.
Marikina 2nd District Rep. Stella Luz Quimbo added that many displaced workers and OFWs have started their own small-scale businesses that would need the help of DTI.
Aside from registered businesses, Quimbo said the government should also assist unregistered micro-entrepreneurs like fishball vendors among others.