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Friday, April 28, 2006
WB funding agency rolls out $10M technical aid to SMEs
THE International Finance Corporation, the private sector arm of the World Bank, will immediately roll out a series of programs for small and medium enterprises as part of a new US$10 million technical assistance facility called PEP-Philippines.
Managed by IFC and co-financed y the governments of Australian and Canada, PEP-Philippines is designed to support the development of small and medium enterprises and aims to increase their contribution to the economy.
"Following a thorough analytical and design process, we are now ready to begin program implementation," said PEP-Philippines Country Coordinator Euan Marshall at a news conference following the opening of IFC's office in Davao City on Wednesday.
PEP-Philippines will now begin the implementation of rural finance, seaweed and local investment climate promotion programs in Mindanao, where poverty incidence is the highest in the country. The rural finance program aims to increase farmers' access to formal sources of credit while the seaweed program will introduce a new technology to increase farmers' revenues.
The investment climate promotion program aims to help reduce the cost of doing business by simplifying business registration procedures.
Several programs are also currently being designed, including a program to assist the Bangko Sentral ng Pilipinas in setting up a credit bureau, another to
assist farmers in improving practices and gaining better access to larger and more profitable markets, and one to help companies with sustainable energy projects in accessing funds from commercial banks.
There are also ongoing studies to determine whether PEP-Philippines can undertake programs on small and medium enterprise banking, entrepreneurship training for overseas Filipino workers and developing alternative modes of settling commercial conflicts of small and medium enterprises.
"Our goal is to increase the contribution of small businesses to the Philippine economy, and in doing so help reduce poverty and improve people's lives," said PEP-Philippines general manager Chris Richards.
While PEP-Philippines does not provide direct financing for small and medium enterprises, its programs are carefully targeted to directly address growth and competitiveness issues that prevent small businesses from becoming the primary drivers of economic growth.
Microenterprises and small and medium business comprises 97 percent of businesses by number and employ 70 percent of the labor force in the Philippines. Yet they account for only 34 percent of the gross domestic product.
In other Asean countries, small and medium enterprises contribute an average of 40 percent to the economy.
PEP-Philippines' programs aim to address this situation and are in line with IFC's five global business lines, namely, reducing the cost of doing business, increasing access to finance, improving market opportunities through value addition, building a business case for sustainability and improving infrastructure services to businesses.
A member of the World Bank Group, IFC's mission is to support the private sector in emerging markets through sustainable investments. To support this mission, IFC and its development partners fund regional facilities around the world, now including PEP-Philippines, with combined annual spending of nearly US$60 million and more than 800 people on the ground.
For Bisaya stories from Davao. Click here. (April 28, 2006 issue)
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