THE closure of businesses and rising unemployment rate due to the coronavirus disease 2019 (Covid-19) pandemic has prompted a local legislator to file a measure to help small and informal businesses in Cebu City.
City Councilor Phillip Zafra’s draft ordinance entitled “Loan Facility Para sa mga Gagmay nga Negosyante” has been referred to the committee on laws for review.
According to his proposal, persons who can avail themselves of the loan include sari-sari store owners, ambulant store owners, street vendors, market vendors, habal-habal drivers, jeepney drivers, farmers, fisherfolk, pedicab drivers, massage therapists, self-employed individuals and other like persons or groups belonging to the marginalized sector or other informal business owners whose main support and sustenance depend on the daily income of such business or rendering of service.
Informal business owners refer to small businesses not registered with the Department of Trade and Industry (DTI) like sari-sari stores and ambulant stores or other like small business engaged in the buying and selling of products and commodities, or rendering or performing of service, with a total financial capital not exceeding P50,000.
Qualified beneficiaries can avail themselves of a P10,000 loan “with provisions on minimal interest on principal loan and imposition of reasonable conditions” which will be provided by the Local Small and Medium Enterprise Development Council (LSMEDC).
The loan is payable within 24 months from the date of release of the money.
The LSMEDC will take charge of all applications and will endorse to the mayor the qualified beneficiaries.
Section 4 of the proposed measure requires that only those who belong to the informal sector can avail themselves of the program. They must residents of the city, registered voters since 2016, at least 18 years old and not beneficiaries of other existing financial programs of the City. They must present a barangay certification showing their business had already been established on or before March 15, 2020. They must also complete business counseling, skills trainings, entrepreneurial seminars and workshops provided by the Cebu City, LSMEDC or in cooperation with the Cebu “Negosyo Centers” and other existing related government programs.
The draft ordinance also states that a start-up capital may also be provided as long as mentioned requirements and requirements to be formulated by the LSMEDC will be complied with.
To further help small and informal business owners, the City Government will also partner with the DTI so informal business owners will be registered as micro, small and medium enterprises (MSMEs) for possible business expansion.
The LSMEDC will formulate the implementing rules and regulations (IRR) 30 days from the effectivity of the ordinance.
An amount of P50 million will be allocated for the program.
Once the council approves Zafra’s proposal, it will take effect 15 days from the day of its approval and publication in a newspaper of general circulation.
Zafra said the pandemic has brought an adult unemployment rate of 45.5 percent in July.
He said the crisis has not only affected MSMEs, but more so informal business owners.
“The pandemic and the implementation of community quarantines have resulted in the suspension of operations and closure of many small-time businesses in Cebu City,” said Zafra.
“As a consequence, their respective businesses have ceased operation and closed shops which put their family at serious risks and could become highly vulnerable to hunger, security and poverty,” he said. (JJL)