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Tuesday, June 10, 2003
SBGFC releases P62M for SMEs, banks
By Christie Enriquez- Uayan
THE Small Business Guarantee Fund Corporation (SBGFC) as of May, according to its Mindanao Manager Alex Bataller, has released a total of P62 million in bank loans.
Bataller, in an interview Monday, said that P57 million of the total amount was released for wholesale borrowing of SBGFC accredited banks in Mindanao.
Direct lending for small and medium enterprises (SMEs) amounted to P2 million, while P3 million was accessed through the lending institution's guarantee program.
In wholesale borrowing, a promissory note rediscounting (PNR) is performed by banks to provide funds for the SME and individual clients at a reduced rate.
"If gusto ng banks maka-avail ng cheaper pass-on rates for the loan funds, they go to government finacial institutions for rediscounting," Bataller explained, adding that SBGFC's pass on rate is 7 percent per annum, while banks charge 8 percent or higher.
The GFI manager said they could finance up to 90 percent of the total amount of credit.
Bataller also added that four SMEs in Mindanao have availed of the SME Unified Lending for National Growth (Sulong) program, with total borrowings reaching P2 million.
Bataller said two of the four SMEs are from Davao City, while the other two are from Bukidnon and Davao Oriental.
Under SBGFC's third function, the guarantee program, a client who applies for a bank loan with inadequate collateral may seek for an endorsement from SBGFC. From January up to May this year, borrowers accessed a total of P 3 million.
"Sa guarantee program, we (SBGFC) act as a part guarantor so that the loan may be released easily," Bataller said. He added that SBGFC might act as loan sponsor representing up to 60 percent of the total credit amount, depending on the case.
Some banks even allow the GFI to act as loan guarantor for up to 80 percent of the total loan, Bataller stated.
"Rather than resorting to foreclosure of properties used as collateral by borrowers right away, we liquidate or we pay the bank our loan share. And it is the option of the bank to collect the remaining balance or allow us to act as attorney de facto for the foreclosure," he said.
Most of the properties were foreclosed at the height of Asian financial crisis in 1997, he said.
(June 10, 2003 issue)
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