DTI seeks more funds for MSMEs

MANILA, Philippines - The Department of Trade and Industry (DTI) is seeking more funds to implement programs to support the growth of micro, small and medium enterprises (MSMEs) in the country.

“We’re pushing that in 2015, we can get additional budget to support MSMEs,” Trade Secretary Gregory Domingo told reporters.

For this year, the DTI has allotted up to P1 billion for programs aimed at helping MSMEs grow, with the bulk or P770 million to be spent for the Shared Service Facilities (SSF) program, which involves the rollout of equipment to improve quality of goods.

Domingo said the DTI wants to get additional funding as it plans to implement the Livelihood Seeding Program which seeks to encourage the creation of more small businesses in the country.

The program which will require around P600 million worth of initial funding, will involve providing training to individuals that would want to become entrepreneurs.

At the end of the training, participants will be assessed and those who pass the evaluation will be given P2,000 worth of goods which they will have to sell.  Once the goods are sold, the individuals can come back to the DTI to purchase new supply of products for sale until they have obtained goods amounting to a total P5,000.

By that time, Domingo said the individuals are seen to be ready to start their own business.

He said the model does not only apply to putting up a small store but also to other businesses such as hollow block making, garments, handicrafts, as well as food processing.

The DTI wants to implement the program to support the growth of MSMEs.

The department is already providing MSMEs access to equipment through the SSF and training through the SME Roving Academy.

He noted that only two percent of the required financing to the small businesses is available at present.

 â€œWhat we really need is about P50 billion a year for three years and then P30 billion thereafter. Those are the volume of loans for SMEs that we need to push into the system, additional, on top of what the system is producing now to be able to fill up that SME financing gap,” he said.

While RA 9501 or the Magna Carta for MSMEs mandates all lending institutions to set aside at least eight percent for micro and small enterprises and at least two percent for medium firms, of their total loan portfolio based on their balance sheet as of the end of the previous quarter, MSMEs, particularly the small businesses still find it difficult to get access to financing.