Gov’t bares fiscal support for MSME
By Joshua Lao – November 13, 2020 (Daily Tribune)
The country’s micro, small and medium enterprises (MSME) will soon receive further financial support from the government following the disclosure of the Philippine Guarantee Corp. (PhilGuarantee) of some P42.3 billion funds for its credit guarantee facilities.
PhilGurantee president and CEO Alberto Pascual said they are eyeing to provide another P20 billion, which can be accessed towards the end of 2021 to benefit about 40,000 MSME.
Of the total amount, P3.6 billion is expected to cover the needs of some 6,000 MSME borrowers by end-2020.
“We are now processing thousands of MSME loan guarantee applications. We expect availments to reach P3.6 billion up to year end with about 6,000 borrowers and about P20 billion towards the end of next year covering about 40,000 MSME,” Pascual said.
According to him, the average loan size under the guarantee program is less than P1 million, with the minimum loan amount set at P100,000 and can be availed mostly by micro businesses borrowing from rural banks.
The guarantee program grants a 50 percent guarantee for working capital loans of one to five years while term loans of up to seven years will have a guarantee of up to 80 percent of the loaned amount.
“On a case-to-case basis, we can extend the guarantee up to 10 years depending on the banks’ risk appetite,” Pascual explained.
The PhilGuarantee chief then mentioned their capacity to leverage the additional P5 billion equity they will receive from Bayanihan 2 by 15 times, generating an extra guarantee provision of P75 billion.