SBCorp, Cebu CFI, Maya prop MSMEs thru TRIBUNE’s AIF

Many traders behind micro, small and medium enterprises (MSMEs) in the Philippines — the backbone of the nation’s economy — have, with eyes closed, bitten into high-interest “5-6” loans due to limited or non-existent access to formal financial channels.

This was revealed at the 8th Asian Innovation Forum (AIF) hosted by the Daily Tribune at the Dapitan Sports Complex in Manila.

An MSME participant disclosed relying on the “5-6” scheme, which offers small loans with a punishing 20 percent monthly interest rate, due to its fast turnaround and daily collection structure.

The informal lenders, often Indian nationals, have catered to MSMEs like sari-sari stores with limited income and difficulty securing traditional bank loans.

As in past AIF events, participants were surprised to learn about alternative options from the Small Business Corporation (SBCorp), Cebu CFI Cooperative and Maya, which offer loans with significantly lower interest rates.

SBCorp, an attached agency of the Department of Trade and Industry (DTI), along with Cebu CFI and Maya, provides loans at more affordable rates.

SBCorp president and CEO Robert Bastillo underscored their commitment to supporting small businesses with loan programs tailored to different stages of operation.

“Many may not be aware, but the Daily Tribune actively seeks out small enterprises to find ways to connect them with helpful resources,” Bastillo said, commending the forum’s focus on MSME empowerment.

Bastillo emphasized SBCorp’s mission to support small entrepreneurs by providing capital. Among SBCorp’s offerings are multi-purpose loans for new MSMEs, businesses operating for at least a year, those in existence for two years, and “suki” or repeat borrowers in good standing with at least six months of repayment track record.

For Filipino-owned businesses, partnerships, and corporations with assets of not more than P100 million, the maximum loanable amount is P20 million. SBCorp’s loans have an interest rate of one percent per month, computed on a diminishing balance, and are payable for up to three years.

“That one percent is based on what you owe and what the balance is. As the balance decreases, the interest also decreases,” Bastillo explained.

Another financial institution offering support is the Cebu CFI Community Cooperative, a pioneering digital cooperative in the country.

Cebu CFI offers micro-lending programs, wherein members can borrow up to P500,000. Salary loans, health loans, and housing loans are among their services, with varying interest rates and terms.

In addition to SBCorp and Cebu CFI, Maya has also committed to providing soft loans to MSMEs. Maya Regional Business Head for NCR Joms Ramirez II noted that 61 percent of Filipino adults borrow from family and informal lenders.

Ramirez emphasized the benefits of placing savings in financial institutions like Maya, which offers a user-friendly platform for phone credits, loans, and cash transactions via QR codes.

He said Maya serves as a one-stop shop for financial needs, empowering micro-entrepreneurs and transforming them into vital community members.

Other speakers and resource persons at the forum included Eloisa Isip, head of the communications department of SBCorp; Rovirg Benin, Maya’s territory solutions manager for NCR West and South; Leslie Yap, the legislative department head of Manila Vice Mayor Yul Servo; Kacie Crisologo, executive assistant of Servo; Cebu CFI regional manager for Luzon Don Garcia; and Kevin Patrick Alejar, operations in charge for Central Luzon, Cebu CFI.

The Philippines boasts a significant number of micro, small and medium enterprises, which form a substantial part of its economic landscape.

According to 2022 data from the Department of Trade and Industry, micro-enterprises constitute 90.49 percent, or 1,004,195, of total establishments in the country.