SB Corp sets modest financing targets this year

The Small Business Corp. (SB Corp.) has set modest targets for this year after surpassing last year’s targets with a record P2.3 billion in direct and wholesale lending, financing, and guarantees.

SB Corp. president and chief operating officer Benel P. Lagua said that they would be content with duplicating last year’s performance, but would still aim for a modest P3 billion to a "fighting" P4 billion target.

"Lending to the small and medium enterprises (SMEs) by the banking system has declined in the past two years, and it seems obvious that we have been able to fill in the vacuum," Lagua said. Data from the Bangko Sentral ng Pilipinas (BSP) reflected a P7-billion drop in lending to the SME sector from March 2002 to December last year.

Financing to SMEs in end-December 2003 surpassed by almost 44 percent the full-year target of P1.6 billion. SB Corp. is an attached agency of the Department of Trade and Industry (DTI).

Of the total financing package, P1.3 billion was released through its wholesale lending program, P765.9 million under its direct lending program, and P271.9 million under its guarantee program.

Lagua said the full swing of the government program called SME Unified Lending Opportunities for National Growth (Sulong) also contributed to the record-setting full-year financial performance.

Sulong is a unified effort of all government financial institutions (GFIs), which developed a simplified set of rules in providing credit access to SMEs in the country.

Since 1992, SB Corp. facilitated a total of P18.4 billion in SME credit assistance. These could be broken down to P8.4 billion under its wholesale lending program, P8.6 billion in credit guarantees, and P1.3 billion in direct lending.

Lagua, however, lamented that the guarantee market could have been extensively developed this year if it has a sovereign risk guarantee, or that all its guarantees are backed directly by the National Government.

Several private banking and financial institutions both foreign and domestic are prepared to extend loans to Philippine small and medium enterprises (SMEs) with the SB Corp. as guarantor. However, they want the SB Corp. to brandish a sovereign guarantee.