Anti-'5-6' lending program releases PHP1.7M loans in Tacloban

TACLOBAN CITY, May 9 --The new financing scheme meant to eliminate the "5-6" lending system has released PHP1.7 million to market vendors in this city for the pilot phase of the program.

Antonio Elmer M. Garado, Small Business Corporation (SBC) desk officer for Eastern Visayas, said the "Pondo sa Pagbabago at Pag-asenso (P3)" already released loans to 38 beneficiaries as of Tuesday since it was launched here last February 9. 

To date, direct lending is only available at the city’s public market with the very limited services of SBC, the financing arm of the Department of Trade and Industry (DTI). 

“Given our limited reach since we are a small organization, we have to promote more extensive delivery system through partner micro-financing institutions (MFIs). If we will establish direct lending facilities, it will not be sustainable,” Garado said.

The program, according to the SBC official, has been running smoothly with repayment rate of 186.9 percent. 

Each beneficiary got a loan ranging from PHP30,000 to PHP50,000. P3’s loan application process is simple and payment is being done daily.

However, its interest rate is only 2.5 percent, way lower than the 20 percent to 30 percent being imposed by loan sharks. 

Rosemarie Obeña, 50 , single mother, is one of P3 beneficiaries in the city. She asked PHP50,000 loan to expand her rice and beverage store.

Her store was badly damaged and lost all stocks when super typhoon Yolanda struck in 2013. She reopened her business by borrowing a PHP20,000 capital from a moneylender.

The central government has identified 30 poorest provinces in the country as priority areas for the new micro-financing program which include Leyte, Samar, Eastern and Northern Samar.

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

(Wanda Chanese O. Antonio, Eunice T. Asuncion, Meagan C. Duya-OJTs/PNA)