SB Corp. eyes bigger slice of SME pie, formation of SME Exchange

The Small Business Corp. (SB Corp.) would like to triple its lending to small and medium enterprises (SMEs) within the next six years. Likewise, it would like to spearhead the establishment of an SME Exchange within the same period.

Taking its mandate one notch higher, SB Corp. hopes to extend a minimum P9 billion in financing assistance to the SMEs by 2009, or on a cumulative basis to over P30 billion since its inception in 1992.

The leap in lending is likewise hinged on its strong participation of the Arroyo administration’s SME Lending Opportunities for National Growth or Sulong program, which had said that it was increasing its total portfolio to P30 billion this year.

"We would also want to expand our fund base from local and foreign sources," SB Corp. chairman and chief executive officer Zorayda Amelia C. Alonzo said.

And it wants to increase its presence in all provinces through the accreditation of rural banks, which have been taking steps to increase its participation in nation-building other than the traditional deposit-taking and lending activities.

Alonzo said that they have initiated a study on the feasibility of an "off-the-board" SME Exchange as a means of mobilizing equity funds for SMEs much like the Philippine Stock Exchange.

Other growth areas within the next six years are: advocacy for policy measures to make it easier for banks to lend to SMEs and for SMEs to borrow from banks; review and strengthen the implementation of the mandatory lending to SMEs provision of the Magna Carta for SMEs to improve SME access to formal private sector credit sources; put in place a stable framework for development and implementation of SME development policies, programs and strategies consistent with the elements of the SME Development Agenda; and fund the SMED Council to improve its ability to link with and mobilize private sector organizations in efforts to improve credit absorption capacities of SMEs.

Meanwhile, SB Corp. exceeded by 57 percent its SME lending for the first semester this year versus the same period in 2003.A total of P1.4 billion was released to 924 business enterprises in various industry sectors nationwide.

SB Corp. president Benel P. Lagua said the increase in lending was mainly facilitated through active participation in the Sulong program.

"We also attribute the increase in our lending portfolio to our aggressive marketing efforts, more liberalized accreditation process for our bank partners and our competitive interest rates," Lagua added.

It lent a total of P962.2 million under its wholesale lending program, P339.2 million under its retail lending program and guaranteed a total of P124.8 million worth of loans under its guarantee program.

Under the wholesale program, the SME-Financing Facility for Regional Markets (SME-FIRM) originated P33.15 million, SME-Funding Access for Short-Term Loans (SME-FAST) originated P910.6, and SME-Funding Entry-point for Entrepreneurs in Livelihood (SME-FEEL), a conduit micro-financing facility originated a total of P6.7 million.

Under its direct lending facility, SME-Financing for Organizationally Competent and Excellent Franchise Business (SME-FORCE) lent P12.1 million, SME-Financing for Receivables of Suppliers‚ Transactions (SME-FIRST) lent P159.4 million, SME-Guarantee Incubation for DTI-Endorsed Projects (SME-GUIDE) lent P93.2 million, and SME-Financing Reach for Exporters thru Network Development (SME-FRIEND) lent P73.2 million.

On a cumulative basis since it started operations in 1992, SB Corp. extended a total of P19.9 billion in SME credit assistance with its wholesale program amounting to P1.7 billion, direct lending program to P9.4 billion, and credit guarantees to P87 billion. – Ted Torres