Saturday, July 26, 2008 Gov't financing programs not maximized by MSMEs
GOVERNMENT'S lending programs for small and medium enterprises (SMEs) are not being fully maximized, mainly because businesses do not meet the requirements imposed by government financing institutions (GFIs).
Even government-supported programs hardly avail of the financing programs being offered by the government.
Leticia Francisco, chief of the One Town, One Product (Otop) credit facility of the Land Bank of the Philippines (LBP), said micro, small and medium enterprises or the so-called MSMEs often cannot comply with the requirements imposed by GFIs.
Often, the MSMEs are considered "high risks" when it comes to lending, saying small businesses often cannot repay the amount they have borrowed.
Entrepreneurs, which are implementing the Otop program of government, are even hard up in obtaining loans from the lending system of government-owned banks.
In the Cordillera, there are no takers yet of the funding allotted for the development of the identified Otops of the various areas in the region.
Francisco said there are no approved projects yet for the LBP's Otop credit program in the region. The Cordillera Administrative Region (CAR) was allotted P100 million for the development and expansion of the Otops.
Most of the approved projects are found in the south, among these are fish processing and furniture making.
The Otop credit facility of the LBP allotted P2 billion for the development of Otop products in the country.
If not used up by the end of the year, the amount allotted in a region will be transferred to other development programs, Francisco said.
MSME's plan to avail of the Otop fund must first seek the endorsement of the Department of Trade and Industry. (JC)
