Financing deal ‘to help SMEs’

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Thursday, August 28, 2014

SURETY FUND. The Cebu Provincial Government contributed P3 million to the Cebu Credit Surety Fund (CCSF) of the Bangko Central ng Pilipinas (BSP). The fund was created to help small businesses gain access to credit. The MOA signing with BSP was held last Aug. 15 at the BSP Regional Office. Present during the signing ceremony were Cebu Vice Gov. Agnes Magpale (2nd from left), BSP Deputy Governor Diwa Gunigundo (3rd from left), Cebu Gov. Hilario Davide III (4th from left). Also present during the signing was Provincial Board Member Jude Durano-Sybico, chairman of the Committee on Cooperatives. (Capitan PIO PG)


TO AID the Small Business Corp. (SBC) in achieving its goal of serving 100 companies in Cebu, it has partnered with the Cebu Chamber of Commerce and Industry and Philippine Exporters Foundation (Philexport) Cebu.

SBC is a government financial institution established to lead in small enterprise development financing and small credit delivery systems. It will be getting referrals from the two organizations.

A memorandum of agreement was signed Tuesday by CCCI president Ma. Teresa Chan, Philexport executive director Fred Escalona and SBC president Ma. Luna Cacanando.

The partnership aims to bring access to credit to micro, small and medium enterprises and facilitate ease of access to enhance businesses and make them competitive.

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CCCI and Philexport will refer at least 100 MSMEs interested to take advantage of SBC’s financial facility during the first year of the agreement. They also agreed to support the SBC in the promotion of its financial and credit services through online promotions and email blasting to their members. They will also provide an avenue for the conduct of regular forum every second Friday of the month.

In turn, the SBC will attend to inquiries of CCCI and Philexport’s inquiries and expedite processing and approval of qualified applications. They also agreed to provide regular feedback to the organizations.

Goal

SBC has a goal of 5,000 borrowers by 2018 and is offering up to P4 billion in direct loans. Last year, they had 700, about 10 percent coming from Cebu. With 800,000 registered MSMEs in the country, Cacanando said about 65 percent is either unserved or underserved.

Escalona said this agreement has long been overdue, as MSMEs have been advocating for better access to credit as banks were not too flexible with their sector.

However, he said the times are ripe for MSMEs to avail of loans, as interest rates are low and banks are awash with money that they need to lend out to be able to provide the interest of the deposits of their clients.

He also said that having better access to credit helps make companies more competitive, especially with the full Asean economic integration looming.

“We need a very solid, low cost structure. If we cannot compete in our own backyard, how can we compete in other countries’ backyards?” he pointed out.

Escalona said such programs need to be strengthened if the country wants to strengthen its middle class.

Most efficient

Cacanando admitted that banks are still the most efficient when it comes to providing the necessary loans because they offer the lowest rates. However, she said not all small businesses pass the requirements.

They hope to challenge banks to provide the same kind of services they are offering to be able to provide to more businesses.

While they like to encourage industries that are in the priority list of the Department of Trade and Industry, Cacanando said they are open to all industries that need financial services.

While the partnership aims to get 100 borrowers at the end of year, SBC board director Gerry Sta. Ana believes the Cebu office can exceed the target and make the releases faster. But they believe that 30 days is a reasonable waiting period for the company to conduct the necessary background checks.

They inspect the state of their working capital, which consists of 90 percent of their requirements, such as their inventory, accounts receivable and sales records. They also look into a company’s fixed assets.

Published in the Sun.Star Cebu newspaper on August 29, 2014.

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