TEN banks released nearly P1 billion in loans to micro, small and medium enterprises (MSMEs) as of the end of February after securing backing from the Philippine Guarantee Corp. (PhilGuarantee).
In a report to the Department of Finance, PhilGuarantee said the guaranteed P952.5 million worth of loans was a 360-percent increase from the P207 million it covered as of December last year.
The loans covered by PhilGuarantee were for 8,839 firms in February, a 200-percent increase from the 2,948 enterprises covered by the program as of December 2020.
“The implementation of improved processing and evaluation parameters starting this year led to this remarkable increase in the number of beneficiaries under the MSME Credit Guarantee Program (MCGP),” PhilGuarantee President and CEO Alberto E. Pascual said in his report.
In terms of distribution by industry, the bulk of the guaranteed loans for MSMEs as of February went to enterprises engaged in wholesale and retail (P723 million), followed by manufacturing (P83.6 million) and transport, storage and communication (P65 million).
Pascual said the total P952.5 million in MSME loans guaranteed as of February 28 were from ten accredited banks and financial institutions.
“The approval of the credit guarantee facilities enabled the availability and accessibility of credit from banks that would have otherwise been reluctant to lend to MSMEs owing to the uncertainties that prevailed with the onset of the Covid-19 pandemic,” Pascual said.
From the start of the MGCP’s implementation last year, Pascual said the PhilGuarantee Governing Board approved a total of P37.7 billion in credit guarantee facilities to 34 banks. At least 22 of these banks are actively submitting MSME loan applications for credit guarantee.
For 2021, Pascual said PhilGuarantee is targeting to grow the portfolio of guaranteed MSME loans to P4 billion. He added they plan to increase the number of beneficiaries by another 8,000 enterprises.
According to Pascual, the average loan size under the MGCP is less than P1 million, with the minimum loan amount set at P100,000, which can be availed mostly by micro businesses borrowing from thrift banks and rural banks.
The MGCP grants a 50-percent guarantee for working capital loans and a guarantee of up to 80 percent of the amount for term loans of up to seven years for capital expenditures.
Under Republic Act 11494 or the Bayanihan to Recover as One Act (Bayanihan 2), MSMEs account for P2 billion of the P5-billion appropriated for PhilGuarantee to aid pandemic-hit enterprises.
The Bayanihan 2 allocation allowed PhilGuarantee to further widen its guarantee headroom of economic activities and extend more assistance to viable but severely affected MSMEs, Pascual said.
Read full article on BusinessMirror