A CEBU City councilor wants informal lenders, including foreign nationals who offer “5-6” loans, to pay taxes.

Councilor Nida Cabrera said she will submit a resolution in the regular session tomorrow asking the Bureau of Internal Revenue (BIR), in coordination with the City Treasurer’s Office and the barangays, to adopt measures to collect taxes from these lenders.

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She suggested that these private lenders, who often use motorcycles to roam the barangays and collect daily payments, be required to secure clearances or register their business with the barangay, the City Government or the BIR.

“Taas man gud kaayo ang ilang interest nga gipangayo aning mga Turko, so, angayan lang pud nga sila kolektahan nato ug buhis, sama sa arkabala diha sa barangay, kay naa man gyud na sila diha kada adlaw (They charge high interest rates so they should also be taxed, in the same manner that barangays collect market or vending fees),” Cabrera said.

Because they require no collateral, these lenders are popular with micro-entrepreneurs like carenderia or sari-sari store owners and barbecue vendors.

Cabrera said these lenders provide an alternative to banks and other lending institutions whose services low-income households and individuals cannot afford.

But high interest rates also leave borrowers, most of whom have to pay daily, with very little money that they sometimes borrow again just to make their payments, she said.

She challenged lending institutions in the City to study how informal lenders do business, so they, too, can offer loans to individuals or groups in the barangays, with fewer requirements.

“Unta mahimo ning eye-opener ba kay dali ra man gud ang proseso nila, mas maayo nga maka-come up pud sila ug ingon niini nga scheme para ma-address ning problemaha (Let’s hope this opens the lending institutions’ eyes, because it would be good if they can offer ways to address this problem),” Cabrera said.

Government, through the Bangko Sentral ng Pilipinas (BSP), is trying to encourage microfinance services in rural banks, so that the “entrepreneurial poor” can have access to financial services, like loans, deposits and insurance. Shopkeepers, ambulant vendors and household-based entrepreneurs are some of the potential clients, according to the BSP website.

Informal lenders, however, go directly to their clients, instead of requiring them to report to rural banks and other microfinance providers. (ETB)