DTI to launch anti-‘5-6’ lending program Feb. 9 in Tacloban

TACLOBAN CITY, Feb. 2 (PNA) -- The Department of Trade and Industry (DTI) will launch on Feb. 9 the micro financing program for small business owners in this city, one of the pilot areas in carrying out loans meant to replace the 5-6 lending scheme.

The DTI through its lending arm, the Small Business Corporation (SBC), has set up a desk at the city public market to accept applications from market vendors ahead of next week’s launching.

Dubbed as Pondo sa Pagbabago at Pag-asenso (P3), the program makes financing more affordable and accessible to small business owners.

“The program is attractive to borrowers because the process is simple and convenient. The interest rate is only two percent per month or 26 percent annually, which is lower than the 20 percent daily under the 5-6 scheme,” said Annalyn Perez, a DTI-SBC staff assigned at the city’s market.

After the launching, the pilot phase will run three months as it will expand to 30 poorest provinces in the country.

Perez said this loan program is open for everyone as long as they have a DTI-registered business, a business operated for at least one year and less than PHP500,00 monthly asset.

Tacloban meat vendor Lolita Bantola, 59, lauded President Rodrigo Duterte order to eliminate loan sharks.

“I already inquired at the SBC office. After the launching, I will immediately stop borrowing money from Indians,” Bantola said

For its pilot phase, the program covers this city for the Visayas, San Jose, Occidental Mindoro for Luzon and Alabel, Sarangani for Mindanao.

Priority beneficiaries include microenterprises and entrepreneurs that do not have easy access to credit, or are accessing credit at very high cost, such as micro-entrepreneurs, market vendors, agri-businessmen and members of cooperatives, industry associations and co-operators.

Loanable amount per end-borrower can range from PHP5,000 for start-ups to PHP300,000, with maximum interest rate of 26 percent every year with no collateral requirement.

The program’s fund will be lent out in the business centers in selected provinces, where the participating microfinance institutions and the SBC can operate.

The 2017 General Appropriations Act has included an initial funding of PHP1 billion for financial assistance, a part of the planned PHP19 billion financing initiative for micro and small businesses in the next five years.(PNA) 

FPV/SQM/John Ray B. Sudario & Felgin C. Silagan (OJTs)