The micro, small and medium entrepreneurs are being extolled by Small Business Corporation, an attached agency of the Department of Trade and Industry, for being good payers even though some of them have already closed shop because of the global contagion three years ago.

During his guest appearance at the Daily Tribune's digital show Straight Talk on Wednesday, SB Corp. president Robert Bastillo said almost one-third of the lenders catered to by SB Corp. have closed their businesses during the height of the Covid-19 pandemic.

"The good thing is that these MSME lenders are still paying their debts even if their businesses were shuttered. These are indeed entrepreneurs as they want to have a good reputation and a good track record when it comes to debt. That is important for us. But still, the majority of the lenders are good payers even though some are delayed," he said.

The past-due rate of SB Corp. during the pandemic was 30 percent, considering that most funds in its portfolio were released during the pandemic.

Past due rate manageable

The past-due rate refers to the lenders who are delayed in their payments.

Currently, the past-due rate of SB Corp. is from 20 to 25 percent, considered by Bastillo as healthy, considering that the country is just coping with the pandemic crisis.

From 2019 to date, Bastillo said SB Corp.'s total direct MSME lenders are now at 55,000, while those courses through cooperatives, micro-finance institutions, and private financing companies — or what they call loan conduits — are now reaching 300,000.

"SB Corp. lenders can borrow from P30,000 up to P20 million maximum. Lenders up to P5 million do not need collateral, but first-time borrowers can only borrow up to P3 million. If they are good payers, they can expand their loan after six months," he said.

No stringent requirements required

In terms of process, SB Corp. does not require stringent requirements for MSMEs if they are only lending up to P100,000.

"We only require other requirements, such as a Mayor's Permit, among others if they are already asking more than P100,000. We have credit scoring in place based on the lender's assets or annual sales. That's a discipline in lending and a risk management procedure," he said.

SB Corp.'s fund being ushered to MSME lenders is coming from its corporate equity, being a corporation.

Inadequate revolving fund

"We have a capital of P10 billion, but what has been given to us for the past 28 years, was P2 billion. It's a revolving fund that is not enough. The P10 billion was given in full in the last pandemic, but those are meant for dying MSMEs. It's hard during that time," according to Bastillo.

He said even the salaries of their employees are coming from the revolving funds, as they are given by the government annual appropriations because they are a corporation that is supposed to earn money.

"We live within what we earn. It is difficult in the sense that it is also challenging. How do you help and keep yourself afloat when everybody around you is struggling? That is our problem during the pandemic. But we are happy to say that despite that, we have a modest income, and we were able to serve MSMEs very fast," he said.

According to Bastillo, MSMEs with P100,000 to P3 million worth of assets are considered micro, MSMEs that have an asset of P3 million to P15 million are considered medium, while those with 100 million assets are considered large entrepreneurs.

The country's MSMEs dominate the entrepreneurial environment, accounting for more than 99.5 percent, 80 percent of which are micro.

The SB Corp. is a government financial institution created in January 1991 under Republic Act 6977 or the Magna Carta for Small Enterprises, amended by RA 8289 in 1997 and RA 9501 in 2008.

It has the primary responsibility of implementing comprehensive policies and programs to assist MSMEs in all areas, including but not limited to finance and information services, training and marketing.