QC releases P5-M loans to small entrepreneurs

Some 593 small-scale entrepreneurs from depressed areas in Quezon City became the latest beneficiaries of the city government’s Puhunang Pangkaunlaran ng Sikap-Buhay (PPSB) program, bringing to 3,500 its total beneficiaries since the start of the program in April 2002.

The beneficiaries, including 433 new members, mostly came from depressed barangays in District II, like Batasan Hills, Commonwealth, Payatas, Sauyo, Pasong Tamo, Bagbag and Fairview.

Mayor Feliciano Belmonte Jr. who was given an overwhelming new mandate by the residents in the last elections, recently led city officials in the simple cheque releasing rites at the City Hall lobby.

Over P5 million worth of non-collaterized loans, ranging from P5,000 for new members to P10,000 for loan renewals were distributed, funds loaned to member-participants came from the National Livelihood Support Fund (NLSF) and disbursed thru a conduit bank, the Cooperative Rural Bank of Bulacan (CRBBI).

Aside from CRBBI, two other conduit banks have been tapped to support the city’s micro-financing program. These are the Novaliches Development Cooperative (NOVADECI) and EuroCredit Cooperative.

The PPSB is a modified Grameen system of micro-financing where no collateral is needed as the borrower themselves become the guarantors of their co-members.

Under the program, borrowers are required to organize themselves into groups of five or six, with each member in effect being a guarantor of the loans of the other members. In case of default, the remaining members assumed the responsibility for repaying the balance of the loan contracted by their co-member.

Each cycle, covering a six-month period, is a time in which a loan is repaid on a weekly basis. Thus, an entrepreneur repays a P5,000 first cycle loan at a rate of only P246 per week over 26 weeks. Of the total repayment amount of P6,396, a certain percentage is aside by the CRBBI as savings and another small percentage is remitted for medicare purposes.

Apart from providing capital, PPSB also offers its members with basic bookkeeping, a basic feasibility studies and sound business tips to enhance their chances of business in entrepreneurship.