Availability of funds stalls anti-'5-6' program in Tacloban

TACLOBAN CITY, March 6 (PNA) – Non-availability of funds has temporarily stalled the pilot implementation in this city of a new financing program meant to kill the 5-6 lending scheme.

The Department of Trade and Industry (DTI) confirmed their financing arm, the Small Business Corporation (SBC), temporarily stopped accepting loan application pending the additional releases for P3 or the Pondo sa Pagbabago at Pag-asenso (fund for change and progress) from the Department of Budget and Management.

The central government, according to DTI Regional Director Cynthia Nierras has disbursed PHP3.8 million for DTI-SBC offices for pilot implementation in three areas - Tacloban for Visayas; San Jose, Occidental Mindoro for Luzon; and Alabel, Sarangani for Mindanao.

In this city alone, the DTI-SBC disbursed nearly PHP940,000 loans for market vendors during the launching. 

“The initial funds have already been used. Our advice to potential borrowers is to just wait or go to the accredited MFIs (micro financing institutions) to avail loans,” said DTI Regional Director Cynthia Nierras.

The DTI regional chief is still uncertain when the additional micro financing loans will be released. 

During the P3 launching on Feb. 9, DTI-SBC turned over PHP43 million to eight MFIs and cooperatives operating in Leyte province under wholesale lending to ensure extensive distribution of loans outside the regional capital.

These MFIs are Taytay sa Kauswagan, Omaganhan Farmers Multi-purpose Cooperative, Lanang Multi-purpose Cooperative, Zaragosa Agrarian Reforms Cooperative, Samahang Pangkabuhayan ng Riverside Multi-purpose Cooperative, Libercon, CARD Bank, and Radiowealth Financing Company.

For direct retail lending from DTI-SBC, the trade department had set up an office inside the city government-run building within the market complex to process applications. 

President Rodrigo Duterte earlier announced the government is setting aside PHP1 billion for the initial implementation of P3 in poor provinces as part of intensified crackdown against 5-6 lending.

The 5-6 scheme, popularized by Indians, issues small loans at a 20 percent interest rate. Payments are collected on a daily or weekly basis.

Nierras said P3’s direct retail lending will eventually be expanded to poor provinces in the region - Leyte, Samar, Eastern Samar and Northern Samar.

Loan amounts to end-borrowers will be from PHP5,000 to PHP175,000, at a maximum interest rate of 2.5 percent per month without collateral.(PNA)
FPV/SARWELL Q. MENIANO