Micro, small and medium enterprises would be offered zero-interest loans under the Philippine Economic Stimulus Act bill, government officials said.
“If we’re able to get zero-cost funding, that’s the fund that we can lend at zero percent also. And then out of that funding, we will just ask for administration fee. So that’s we can pass on, the zero-interest rate. That’s the beauty of the economic stimulus package,” Trade and Indu Sec. Ramon Lopez said.
Lopez earlier said the Congress was allocating P80 billion that would be channeled through DTI’s financing arm, Small Business Corp., to MSMEs.
While waiting for the stimulus measures to be passed in the Congress, SB Corp. has opened a loan application for MSMEs under DTI’s Covid-19 Assistance to Restart Enterprises program.
During the online business forum of Foreign Correspondents Association of the Philippines , Marikina City 2nd District Rep. Stella Luz Quimbo said the interest-free loan under the PESA bill would be coursed through SB Corp. as it has wide reach to MSMEs.
Quimbo, who is also the co-author of the PESA bill, said even if SB Corp. partners with conduits to roll out the loan, the zero-interest-rate term of the loan shall be kept.
She also echoed Lopez’s statement that borrowers will only pay administration fees, but the interest rate shall remain at zero.
In the same e-forum, Philippine Chamber of Commerce and Industry president Benedicto Yujuico said intermediary banks put up to 18-percent interest on loans, which MSMEs cannot afford during this Covid-19 pandemic.
Moreover, Quimbo estimated there is a bigger number of small businesses in the informal sector, which should be given assistance by the government.