Interest-free loans for Covid-19 hit MSMEs

CORONAVIRUS pandemic-hit micro, small and medium enterprises (MSMEs) in the Cordillera Administrative Region (CAR) can now gain access to interest-free loans while the manufacturing sector can avail of assistance to meet the needs of the domestic markets and export commitments under the proposed Philippine Economic Stimulus Act of 2020 (PESA).

A P1.4-trillion economic stimulus package for businesses and employees affected by coronavirus disease 2019 (Covid-19) prioritizes granting interest-free loans by the Small Business Corporation (SB Corp.) for MSMEs with a provision of a “loan forgiveness” program.

While the exact amount is not yet final, it has been proposed that the SB Corp. get a budget of P75 billion to expand its loan programs for MSMEs or enterprises which are out-of-reach of the formal banking industry.

The loan forgiveness program means that the SB Corp. may waive a maximum of 15 percent of the loan provided that the borrowers pay all their installments on time and according to the payment schedule agreed upon,” he said in a webinar.

An amount of P50 billion for 2020 and another P50 billion for 2021 are also proposed to be appropriated in favor of the Land Bank of the Philippines (LBP) and Development Bank of the Philippines(DBP).

This amount will be used to provide a loan program for non-essential businesses to assist and encourage them to continue investing in their businesses.

Apart from the loan programs, the PESA bill will offer grants for the provision of education, training, and guidance to MSMEs.

Assistance will be given to business entities engaged in the manufacture of products and supply of services to meet the needs of the domestic market and export commitments.


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