June 19, 2018, 7:48 pm
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DA sets P4B for MSMEs to fight 5-6

President Duterte has approved another P4 billion fund for   micro, small to medium enterprises (MSMEs), according to Agriculture Secretary Emmanuel Piñol.

Piñol said interest rates on loans provided to MSMEs from this fund will be lower than those charged by the informal loan sector like the 5-6.

He said market vendors who take out loans from 5-6 lenders pay  20- percent interest. They then pass on this burden to the customer by charging higher prices on their goods.

Piñol said the P4 billion is on top of the P1-billion allotted under the  Department of Trade and Industry’s (DTI) Pondo sa Pagbabago at Pag-asenso (P3) program.

 “Based on studies, the amount of money circulated by 5-6 lenders is at P30 billion. Unless we deal with that, consumers will be at great loss since they are the ones paying the interest of the 5-6 lenders,” he said.

Piñol said the government plans to tap a grant from China to fund this lending program.

Last May, the DTI piloted the P3 Program in Mindoro, Sarangani and Leyte. The program’s fund prioritizes  the poorest provinces where the participating microfinance institutions and the  Small Business Corp. can operate.

Loanable amount per end-borrower can range from P5,000.00 for start-ups to P300,000, with maximum interest rate of 26 percent per annum with no collateral requirement. This rate is significantly below the 20 percent per day/ week/ month charged by 5-6 lenders.
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