DTI to roll out anti-usurer program in Region 8

TACLOBAN CITY, May 23 – The Department of Trade and Industry–Small Business Corporation (DTI-SBC) is eyeing an extensive distribution of the loan program meant to eliminate the "5-6" lending scheme through micro financing institutions (MFIs) starting June. 

Antonio Elmer Garado, DTI-SBC desk officer for Eastern Visayas said partner MFIs has been preparing for wider coverage of "Pondo sa Pagbabago at Pag-asenso (P3)", a priority program of President Rodrigo Duterte to crackdown on loan sharks. 

Three months ago, the trade department approved the PHP43 million wholesale lending for partner conduits. 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.

Partner MFIs (with corresponding credit lines) are Taytay sa Kauswagan (PHP10 million), Omaganhan Farmers Multi-purpose Cooperative (PHP5 million), Lanang Multi-purpose Cooperative (PHP5 million), Zaragosa Agrarian Reforms Cooperative (PHP1 million), Samahang Pangkabuhayan ng Riverside Multi-purpose Cooperative (PHP1 million), Libercon Multi-Purpose Cooperative (PHP1 million), CARD Inc (PHP10 million), and Radiowealth Finance Company (PHP10 million).

These firms have been operating in Leyte and Samar provinces, tagged as P3 priority areas. 

“To ensure sustainability, the more extensive delivery system will be through partner MFIs. 

If we will establish direct lending facilities, it will be very costly. These MFIS have their established system of releasing loans and collecting payments,” Garado said.

Currently, DTI-SBC direct lending is only limited at the city’s public market. Tacloban in Leyte, San Jose in Occidental Mindoro, and Alabel in Sarangani are considered as pilot areas. 

Priority beneficiaries include micro-enterprises 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.

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 the 5-6 lending.

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

(Sarwell Q. Meniano/PNA)