Micro-entrepreneurs deem state funds as non-existent

CEBU, Philippines - While the government, through the Government Funding Institutions (GFIs) had been announcing the availability of loan assistance to the micro and small entrepreneurs, players are questioning its existence.

“We are still suffering from unavailability of funding support from the government. If there is any, micro or small entrepreneurs obviously can not avail of it because of high standard for requirements that can only be complied by medium to large companies, not the small businesses,” said Alfred R. Awe vice chairman for Filipino Cebuano Business Club, a group of small and micro entrepreneurs in Metro Cebu.

The group suggested that the Magna Carta for MSMEs should be implemented seriously, so that legitimate players or the supposed target beneficiaries will be able to avail of the funding.

He added that small and micro-businesses most often could not meet the collateral requirements and other documentary processes needed by the GFIs, which prompted most of them to resort to loan sharks who release funds outright.

Awe said that a loan application to a GFI agency for instance, like SB Corporation, of Quedan Corporation will take months, or half-a-year before its gets approved, by that time small businesses’ funding requirements have already gone overdue.

He said the government should understand that business operations for micro and small entrepreneurs is different from an established company, where in planning and fund allocation is made for months in advance.

For a sidewalk vendor or sari-sari store owner he said money is being rolled out on a daily basis, and need for increased capitalization is immediate.

Thus, the loan sharks who are operating underground, who do not even pay taxes to the government, is flourishing, because grassroots entrepreneurs funding need can not wait for months.

Land Bank of the Philippines (LBP-7) earlier reported that it has recorded a total outstanding of P6.65 billion for its priority sectors in Central Visayas, as of March this year.

LBP, one of the government’s largest GFIs identified small farmers and fisherfolk (SFF), cooperatives, small and medium enterprises (SMEs), agri-infrastructure projects of local government units, agri-business and environment-related projects, as its priority sectors as loan beneficiaries.

Awe said while it is good to course through loans for small and micro players to cooperatives, some or majority of start-up entrepreneurs can not benefit from this, as most of them are not member of a cooperative, some are just starting.

Banks on the other hand, are considering these kinds of entrepreneurs as high-risk borrowers.

Republic Act 9501, known as the new Magna Carta for Micro-Small and Medium Enterprises (MSMEs) requires that all banks should lend at least 10 percent of its total loan portfolio to MSMEs. — Ehda M. Dagooc