SBC financial programs aim to empower MSMEs

CEBU, Philippines - The Small Business Corp. (SBC), in line with its mission to develop and provide financial services to empower micro, small and medium enterprises (MSMEs) in the country, is aggressively encouraging the sector to avail of SBC’s financial services.

SBC’s financial programs include the MSME retail lending program, wholesale lending wholesale microfinance and wholesale microfinance, which was SBC’s best performing program in 2009.

SBC Visayas Office Manager Cesar Antoni told The Freeman that his office aims to release P800 million of loans in all programs this year. The office is also mandated to earn P60 million for 2010.

He said that in general, SBC’s financial activities last year was “bad,” but that this was not an isolated case because of the negative effect of the real estate crunch in the United States to the global economy including the financing sector.

“Despite our constant marketing, take-up was slow because there was also no clear expansion of businesses last year due to the crisis. The decline in SBC’s performance was both due to prudence on our part and the companies as well,” Antoni said.

However, the performance of SBC’s wholesale microfinance program increased by 26-percent based on a nine-month data in 2009 to P827 million from P658 million in the same period in 2008.

“Our increasing microfinance loans are indications of the corporation’s commitment to the government’s anti-poverty initiatives,” former SBC chairman and chief executive officer Virgilio Angelo said in a report.

SBC’s micro-finance program is a $15-million official development assistance (ODA) from the International Fund for Agricultural Development (IFAD). The program intends to increase the volume of finance availability to micro enterprises by accrediting conduits or partners such as banks and cooperatives who will deal directly with the micro enterprises in their financing needs. The target borrowers for this program are pre-enterprise micros or micro enterprises graduating to small enterprises.

Meanwhile, Angelo said SBC’s MSME retail lending program released a total of P282 million to MSMEs nationwide. The corporation expects the performance of the program to improve this year with the implementation of its redesigned format wherein it is now “purpose-based instead of industry-based, thus providing a wider array of financing options to our clients.”

The wholesale lending program on the other hand experienced a decline in performance in the third quarter of last year to P1.23 billion from P1.85 billion in the same period in 2008.

The program aims to improve the ability of SBC’s conduits to lend to MSMEs through funding access at terms matched with the requirements of the clients. Conduit rural banks and cooperatives may access a maximum credit line of P100 million.

SBC’s funding options to its conduits under this program include a short-term portfolio rediscounting were a batch of sub-loans is funded based on the earliest maturing promissory note; individual promissory note rediscounting where there is matching of terms; medium term tenor on lending; and case to case advance drawdown.

“SBC will continue to be consistent with its mission to develop and provide financial services in a progressive and sustainable manner to empower MSMEs as viable business partners,” Angelo said.