Government sets aside P10 billion loan facility for MSMEs

August 23, 2024 | 12:00am

MANILA, Philippines — The financing arm of the Department of Trade and Industry has set aside P10 billion which micro, small and medium enterprises (MSMEs) can tap as part of the agency’s push to help the sector grow.

A total of P10 billion is available for lending to MSMEs under the Small Business (SB) Corp, acting DTI Secretary Cristina Aldeguer-Roque told reporters on the sidelines of the Metro Manila Business Conference yesterday.

“But there’s actually more funding that will be coming in for the MSMEs to loan,” she said.

She said the DTI believes access to finance is a critical tool to allow MSMEs to expand, grow and reach their full potential.

“With this, the DTI is aggressively working to improve access to credit and other forms of financing for MSMEs,” she said.

Part of these efforts is the approval of a P200-million startup facility for micro businesses.

Under this new facility, businesses can avail themselves of a loan without having to pay interest or principal for the first six months.

For the next six months, Roque said businesses would only have to pay the interest.

She said SB Corp. is also making available financing to support franchising.

“Franchising offers a proven way for MSMEs’ expansion and for brand building. The DTI is actively promoting franchising as a strategy for the MSMEs,”she said.

She said the DTI is working closely with the Philippine Franchise Association to identify the top 20 franchises that have good track record and can move quickly.

“By adopting franchising models, MSMEs can leverage established brands, access proven business systems and benefit from economies of scale. This can significantly accelerate their growth, enhance their market presence and create new opportunities for employment and entrepreneurship,” Roque said.

She said the DTI also added more ways for MSMEs to be able to borrow from SB Corp. including financing for purchase orders.

“So we encourage the MSMEs to use SB Corp. because first, the interest of the loan is very low compared to others. And aside from that, it is really a loan specifically for MSMEs,” she said.

She said the DTI is also working with other banks to help improve MSMEs’ access to credit.

To help expand MSMEs’ reach, she said the DTI is setting up mini stores in Philippine embassies where products will be displayed.

The DTI is also working with Go Negosyo and other government agencies to equip MSMEs with the skills and tools they need.

“Remember, knowledge is power. The more we know, the stronger we become. So we must never stop learning because we will never know when we will need this,” Roque said.