Banks to allot 10 percent funds to SMEs
By Cris Evert Lato
Cebu Daily News
First Posted 11:49:00 07/04/2008
A PROVISION requiring all banks to allocate 10 percent of their loanable portfolio to micro, small and medium Enterprises (MSMEs) is one of several amendments to be introduced into Republic Act 9501 otherwise known as the country's Magna Carta for MSMEs.
This was one of several points discussed in a meeting between the Department of Trade and Industry (DTI) and more than 100 MSME owners in Cebu City held yesterday.
The DTI consulted stakeholders in different regions in the country to formulate the the implementing rules and regulations (IRR) of RA 9501.
RA 9501 was signed into law last May 23. The IRR is expected to be published 90 days (or on August 23) after the law was passed.
“The amended law now includes extending assistance to micro enterprises apart from the small and medium and gives us a pure measurement on the different enterprises,” said Virgilio R. Angelo, chairman and chief executive officer of Small Business Corp. (SB Corp).
SB Corp. is a government financial institution attached to the DTI and provides financial services and capacity-building support programs to MSMEs.
Cesar Antoni, SB Corp. Visayas Manager, said around P950 million in fresh loans are available for SMEs nationwide for this year alone.
Of that amount P600 million was alloted to wholesale lending for SMEs, P130 million for retail lending program, P150 million for micro financing and P70 million for credit guarantee.
RA 9501 describes micro enterprises as business with total assets of P3 million or below, small enterprises between P3 million to P15 million and medium enterprises with P15 million to P100 million.
Under the old Magna Carta for Small Enterprises, micro enterprises are those with assets not more than P1.5 million, small enterprises between P1.5 million to P15 million and medium enterprises have total assets ranging from P15 million to P60 million.
“There is an adjustment even in the scale of assets because the value of money is already different,” said Joyce Natalie Yang, who sits as SMED Council private sector representative for the Visayas.
Yang said the existing Small and Medium Enterprise Development Council (SMED Council) will become the MSME Development Council (MSMED Council) under the new law.
It will still carry out the same duties such as helping establish an environment conducive for the growth of these enterprises.
Yang said the secretaries of tourism, interior and local government will be two of the newest members in the council.
“Tourism is also considered an important area for SME development while the role of the local government unit in making laws is crucial because they can better assist SMEs in their localities,” Yang said.
In the Philippines, 92 percent of the companies are micro enterprises while seven percent are small and medium enterprises.
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