Interest-free financing options available for micro, small firms

Micro and small enterprises (MSEs), including those venturing into agri-fishery activities, can avail of interest-free loan facilities to scale up their business, or resume their operations amid the coronavirus disease 2019 (Covid-19) and quarantine measures.

Noel Clarence Ducusin, chief of the Program Development Division at Agricultural Credit Policy Council (ACPC), said the Agri-Negosyo Loan Program (ANYO) targets returning overseas Filipino workers (OFWs), as well as partnerships, associations or cooperatives belonging to MSEs which are engaged in agriculture and fisheries.

Ducusin said micro firms may loan up to PHP300,000, while small enterprises can borrow PHP300,000 to PHP15 million payable up to five years.

“In the agricultural sector, we have businesses that are rather large and would require facilities and machineries that are expensive,” he said during the 2020 National MSME Resilience e-forum.

Ducusin said small enterprises would be able to get a substantial loan if a project can benefit small farmers or shareholders, but loans should not be intended to procure real estate assets like land.

“For instance, a processing company would apply for a loan and would have a marketing contract with smallholder rice producers and would supply this processed rice to the Kadiwa outlets or centers of the Department of Agriculture then, it can be considered. So we are clear that if the loan can benefit more smallholders, then it has a chance for approval but we are very careful about providing loans to the negosyante (businessmen), the traders who will only solely benefit on what can be derived from the business undertaking,” he added.

Ducusin further said the ANYO loan facility is implemented through government and non-government financial institutions (GFIs), cooperative banks, large and small cooperatives, non-governmental organizations (NGOs), market financial institutions, and some associations.

Meanwhile, the Small Business Corporation is in talks with GFIs for expansion of Covid-19 Assistance to Restart Enterprises (CARES) program designed to help pandemic-affected MSEs to reopen their businesses.

In the same e-forum, SB Corp. Vice President for Planning and Advocacy Frank Lloyd Gonzaga said the P1-billion funds for loans under the program is not enough as these can only lend about P100,000 to 10,000 enterprises.

He said they have already received 23,477 loan applications.

“Ito ay talagang kulang na kulang sa ngayon kaya kami pansamantalang hindi tumatanggap ng application sa ngayon (This is not really enough now that is why we are temporarily not accepting loan applications). But we are now talking and we are actively discussing with the Landbank of the Philippines as well as the Development Bank of the Philippines for some arrangements on how we can expand this program,” he added.

Gonzaga said qualified borrowers are those 100-percent Filipino owned MSEs, one year in operation prior to March 15, and with asset size of not more than P15 million.

The community quarantine was raised over Metro Manila since March 15, and the mainland Luzon since March 17.

He added micro firms with asset size not exceeding P3 million can borrow up to P200,000; while small enterprises with asset size not exceeding P15 million may loan up to P500,000.

Gonzaga said this is an interest-free loan and collateral is not required for the program.

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