DTI-SBCorp approves P2.35B loans for MSMEs

The Department of Trade and Industry (DTI) said Wednesday it has approved more than P2 billion worth of loan applications of micro, small, and medium enterprises (MSMEs) that sought relief assistance to restart their businesses amid the COVID-19 pandemic.

In a statement, the DTI said, through its financing arm Small Business Corporation (SBCorp), it has approved a total of 21,695 MSME loan applications as of February 9, 2021.

The loan approvals are pursuant to the Bayanihan COVID-19 Assistance to Restart Enterprises (CARES) program to provide MSMEs with urgent relief needed to restart their businesses amid the pandemic.

“To date in the implementation of the Bayanihan CARES Program, SBCorp has already approved 21,659 loan applications. These loan applications have an equivalent approved loan amount of P2.35 billion,” SBCorp president and CEO Ma. Luna E. Cacanando said.

Under Republic Act No. 11494 or the “Bayanihan to Recover as One Act,” financial support amounting to P10 billion has been allotted to the CARES program to help mitigate the adverse impact of the pandemic on MSMEs.

Loans from the Bayanihan CARES program are interest-free, collateral-free, and are available to MSMEs, cooperatives, hospitals, and tourism businesses that have been in operation for at least one year. Repatriated or returning OFWs who wish to engage in start-up business may also apply for a loan under the program after some training, according to the DTI.

“Our efforts to provide relief and assistance to MSMEs through the CARES program are further strengthened, especially as we work towards the sustainable and inclusive recovery of our nation. Over 20,000 MSMEs have already benefited from this loan portfolio, which has helped businesses survive from permanent closure, recover from the effects of the pandemic, save or even create more jobs, and provide income to millions of Filipinos and their families,” Trade Secretary Ramon Lopez said.

“We have streamlined the application process and made it online to ensure that more businesses are able to avail of this service. SBCorp completes its evaluation of loan requests within 7 working days, even faster if the documents are complete. Submission of documents such as BIR tax return can fastrack approval," he said.

The Trade chief said that there is currently no backlog on its loan evaluation work.

“We are even promoting the program to more MSMEs applicants,” Lopez said.

The Trade chief noted that MSMEs are a key pillar of the country’s economy, which contribute 35.7% to gross domestic product, employ 62.5% of the labor force, and constitute 99.5% of all business establishments in the country.

Based on the nationwide survey of over 3,000 MSMEs conducted by DTI, around 38% were forced to close down during the height of lockdown in April to June last year, and this number went down to 5% towards year end 2020, as more sectors were gradually reopening. 

Loan terms under the program can be paid up to four years, including a grace period of up to 12 months, giving MSMEs enough breathing space for the business to recover, and time to pivot and innovate their business models.  

To comply with social distancing measures and to reduce physical contact, SBCorp has adopted a completely online loan application and evaluation process, except for occasional phone verifications.

The loan releasing process has likewise shifted online, unless physical signing is preferred and requested by the approved loan applicant. 

“We encourage all MSMEs across the country in all regions to consider taking the step in reopening or reconfiguring your respective businesses. The features of the Bayanihan CARES loan are intended to allow entrepreneurs to restart their businesses with ample elbow room.  There is no need to worry about loan repayments for one year. There is also no need to worry about escalating financing costs," Lopez said.—AOL, GMA News