A PENDING BILL should improve government outreach to micro, small, and medium enterprises (MSMEs) to ensure that they tap its financing programs, a small-business advocate said.
“(Legislators) have to be sure that the government has the ability to reach these micro entrepreneurs, (because) sometimes, the problem there is reach… how do you determine who is qualified and who is not, what if they don’t have the mechanism to really reach them?” Go Negosyo founder Jose Maria A. Concepcion III said via phone.
He was referring to a bill in the House of Representatives that seeks to provide low-interest, collateral-free financing to MSMEs. Legislators passed the measure on third and final reading last week.
Under House Bill No. 7363 or the proposed Pondo sa Pagbabago at Pag-asenso Program (P3) Fund, the Small Business Corp., under the Trade and Industry department, will directly lend 40% of the P3 Fund, while accredited partner financial institutions will lend the remaining 60%.
The P3 fund is an alternative to the usurers that small businesses turn to for funding. The practice is known as “5-6.”
Mr. Concepcion said that “SB Corp. (will) normally pass the funding on to the banks and the banks are the ones who reach out to MSMEs.”
Employers Confederation of the Philippines President Sergio R. Ortiz-Luis, Jr. said via phone that the measure “will not even scratch the surface.”
Mr. Ortiz-Luis said that the government should “invest in SMEs (small and medium enterprises), (and) not look at them as like an expense.”
Mr. Ortiz-Luis added that investing in SMEs will require “maybe even P30 billion to start with,” calling such funding support a long-term solution that “would create jobs (and) graduate the SMEs to become the backbone of the economy,” adding that such support is preferable to conditional cash transfer programs.
“We have the most underbanked MSMEs in the whole of Asia. We are being left behind,” he added.
MSMEs account for 99% of all businesses, Mr. Ortiz-Luis has said. — Beatriz Marie D. Cruz
