Impoverished farmers, fishermen and ordinary wage earners can’t help but turn to loan sharks to settle their financial problems.
But after securing loans from 5-6 providers, they realize the interests they are paying for their loans are too high.
Since there’s no more law penalizing usury, the interest rates imposed by loan sharks have become the headache of the “borrowers” who are finding it hard to pay their debts.
For this reason, the House of Representatives approved on third and final reading a bill intended to give people an alternative source of financing so they are not tempted to borrow from loan sharks.
House Bill No. 7446, or the “Pondo sa Pagbabago at Pag-asenso” or the “P3 Fund,” seeks to establish a financing program for micro, small and medium enterprises (MSMEs).
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It seeks to provide an affordable and simple micro-financing program for small businesses, notably in the poorest areas. It also aims to bring down the interest rates of loan packages for small businesses so they would no longer have to run to informal lenders.
The beneficiaries of this bill will be the micro enterprises and entrepreneurs, including market vendors, agri-businessmen and members of cooperatives, industry associations and cooperators. Under the proposed legislation, the P3 loan beneficiaries will not be required to provide collateral.
The Small Business Corporation (SB Corp.), the financing arm of the Department of Trade and Industry (DTI), is tapped as the lead implementing agency of the “P3 Fund” to help Filipinos alleviate their lives.
Loan sharking is not new in the country and even some cooperatives have turned in this nefarious activity for the tubong-lugaw (excessive) profit they get from it.
We support the early enactment into law of HB No. 7446, but there should also be a law criminalizing loan sharking. Likewise, bring back the usury law to stop the biggest loan sharks of all – the banks and credit card companies.
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