Business support groups to help ease loan access

CEBU, Philippines – Various Business Support Organizations (BSOs) are urged to take advantage of the financial support offered by the Government financial institutions (GFIs), in partnership with member-business owners.

GFIs are now dishing out different loan facilities highlighting a “no collateral” requirement, amid the industry-wide complaint that loan availability via GFIs are good as “nothing” because of stringent requirements.

Under a wholesale lending program, BSOs could serve as conduit in providing loans assistance to their members.

In Cebu, there are a number of BSOs in various industries like PhilExport, Fashion Accessories, Furniture, seaweed processors, among others.

Jane Tambanillo executive vice president for Philippine Export-Import Credit Agency (PhilExim) business development Group 2, said that there is a facility that will be availed of by industry members, through the wholesale and direct lending programs.

Without requiring collateral, BSOs will serve as the partner of PhilExim in this program, to provide easier financial assistance to companies.

Under this arrangement, she said that BSOs are responsible for administering and monitoring of loan availments and repayments of their members. These are also the ones that evaluate their credit worthiness.

“You can borrow from PhilEXIM through a credit line for your group. We lend up to P25 million and later on, if you require more on a case-to-case basis, you can increase it depending on your performance on your original P25 million,” she told BSOs.

Tambanillo clarified that such program no longer requires guarantee nor a Joint and Several Signatures (JSS) agreement or surety-ship.

However, a deed of undertaking from the officers of the associations is needed, she said.

She added that both direct and indirect exporters are eligible to access such loan program.

Apart from this particular lending program, she said PhilEXIM is also offering the SME Unified Lending Opportunities for the National Growth (SULONG), which does not decline a loan only on the basis of inadequate collateral.

For her part, Development Bank of the Philippines (DBP) Sr. Asst. Vice President Dulce Rañoza said businesses can access low-cost borrowing despite the absence of acceptable collateral through the Bangko Sentral ng Pilipinas’ Credit Surety Fund (CSF).

Rañoza said local government units, financial institutions, cooperatives, the International Loan Guarantee Fund (IGLF) manage the surety fund that will be deposited entrust to a financial institution like the DBP.

“The borrowers who are members of the cooperatives can apply for loans from financing institutions or any bank provided the cooperative will endorse the borrower or the member to the oversight committee usually in these financial institutions. In case of default that the cooperative member cannot pay the loan, the surety fund will cover the payment for the loan,” she explained.

The Credit Surety Fund operates at the provincial level and has been launched in Cavite, Aurora and Bohol. The BSP will next introduce the fund in Davao and eventually in some key areas in the Visayas and Mindanao.

The Small Business Guarantee Corporation (SBCorp), on the other hand, is also offering its MSME Whole sale Lending Program which provides funding to participating financial institutions(PFIs) nationwide for lending to MSMEs. 

Collateral per se is not a determinant in approving or denying a loan. The SBCorp has made its collateral policy flexible for MSMEs.

Likewise, the Land Bank of the Philippines earlier informed the exporters about the availability of its P1-billion lending facility through the Development Advocacy (DevAd) Program.  

Under the DevAd program, businesses can qualify for loans even without collateral as long as they have “viable projects and confirmed market.”