Small businesses seek greater access to financing

Better access to financing and greater accountability for land administration will greatly  help small business in the country, the Philippine Chamber of Commerce and Industry (PCCI) said at a forum it hosted Tuesday. A survey done by PCCI between June and September 2012 showed that while many micro, small, and medium enterprises (MSMEs) are satisfied with bank lending, they find interest rates to be slightly expensive. MSMEs have also noted difficulty in accessing lending because mandatory lending to small businesses are not highly implemented, according to the survey conducted in Laguna and Pampanga and had 53 respondents. But according to speakers in the "Philippine Property Market Scorecard: Conditions for Small Businesses" forum held at the PCCI office in Taguig, there are steps being taken to ease restrictions in MSME lending. "Policies on MSME lending should be relaxed and there should be strict implementation of the Magna Carta for MSMEs,” said Ryan Patrick G. Evangelista, PCCI deputy secretary general. “Lending schemes should also be improved for real property lending." Evangelista added banks, which are mandated by law to set aside at least 8 percent of its total loan portfolio for MSMEs, look for alternative means to comply with mandatory lending requirements through alternative means or consider the penalties to be low. PCCI said MSMEs can use property as a collateral to finance their businesses, although it noted that MSMEs usually complain about the slow process of land titling and the number of agencies involved. The banking sector, however, said MSMEs need to be vigilant in ensuring its compliance with lending requirements. "The remedy is not to provide more collateral but to be more transparent in cash flow, that way banks are more amenable to giving financing," said Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor A. Espenilla, Jr., adding the BSP is ready to dialogue with both banks and MSMEs to ensure easy access to financing. PCCI has partnered with the Center for International Private Enterprise to improve real property rights and access to credit for MSMEs. — KBK, GMA News