The Small Business Corporation, or SBCorp, an attached agency of the Department of Trade and Industry, has onboarded artificial intelligence in its loan facility to ease online lending to micro, small and medium enterprises.
“We just rolled out our business assessment with machine learning. It analyzes financial performance. This is part of our digitalization (efforts), which keeps us updated with the modern times,” said Wally Calderon, SBCorp vice president for Innovation.
Calderon shared this on Tuesday during DAILY TRIBUNE’s fifth Asian Innovation Forum in Barangay Cupang, Muntinlupa City.
AI collects and analyzes borrowers’ data so lenders can quickly determine their creditworthiness, needed loan amount, and suitable loan products.
SBCorp offers MSMEs the RISE UP Loans that cater to those affected by the pandemic.
The loan process is fully online through the SBCorp website, which facilitates document submission and funds delivery through e-wallets and bank transfers.
58,000 borrowers
Calderon, in November 2023, said that as of October 2023, the SB Corp has already provided multi-purpose loans to 58,000 plus borrowers, or around P10.8 billion worth of loans.
Meanwhile, the Asian Innovation Forum allows leaders from the government and private firms to share insights on digital trends with entrepreneurs so they can grow their businesses.
SBCorp reported that it has distributed funds to over 62,801 MSMEs under the RISE UP Loans, which has a 12-percent per annum interest or one percent each month with a diminishing balance.
“Diminishing balance is a big help to borrowers. Every time they pay the interest, the principal amount decreases,” Calderon added.
In contrast, he said traditional lenders impose compounding or add-on interest that the borrowers pay heavily for during the initial months.
RISE UP Loans are classified into three. First, the Micro Multi-Purpose Loan caters to micro-enterprises and provides up to P300,000.
Second, the SME Multi-Purpose Loan Suki is available to existing SBCorp borrowers in good standing with at least six months of repayment track record. It offers up to P20 million.
Last, the SME Multi-Purpose Loan First Timers caters to small and medium enterprises and provides up to P20 million.
Most of these loans do not require collateral except loans of more than P5 million.
Personal data assessment
At least 15 forum participants registered their data with SBCorp to have their finances and loan purposes assessed.
One of them is 60-year-old Clesa Patnugot, who used to own a sari-sari store.
“Before the pandemic, I was already selling a lot of frozen foods like tocino. I don’t have enough capital now to restart my business, as I just spent some of it to repair our house in San Pedro, Laguna,” she said.
If her loan application is approved, Patnugot said she can also support her 84-year-old mother, who lives in the province where her family earns money from renting out a property.
“All three of my children are now working, and two of them have their own families, so they can no longer support me 100 percent,” she said.
Patnugot said she plans to sell soft drinks and other beverages to cater to players in the billiards hall beside her house.
