With a P19 billion worth of fund for the next five years, the program is aimed to finance micro, small and medium businesses. And to eliminate 5-6 lending which charges a huge amount of interest (20%) per month.
“The P3 is designed to bring down the interest rate at which micro-finance is made available to micro enterprises,” said Trade Secretary Ramon Lopez.
For 2017, the allocated budget for the program is P1 billion.
Initially, the program will be launched in the provinces of Mindoro and Leyte islands and Sarangani, which are among the top 30 poorest provinces. Eventually, we hope that this will be implemented all through out the country.
SOME 20 POOR PROVINCES IN THE PHILIPPINES
"Fund delivery to micro-enterprises shall be carried out in either by wholesale lending to non-bank financial institutions like MFI-NGOs, and cooperatives which shall on-lend the fund to beneficiaries or by direct lending by SB Corp, ” Lopez said.
Priority for the program are those entrepreneurs who doesn't have easy access to credit. Examples are agri-businessmen or farmers, vendors, and micro entrepreneurs like sari-sari store owners, and many more.
The good thing about the program, is that it does not require collateral. Borrowers can avail minimum of P5,000 to as much as P300,000. The interest rate shall be 2.17% monthly, a big difference compared to the 5-6 interest rate of 20% monthly.
"This alternative funding dedicated for micro and small enterprises is meant to discourage the 5-6 money lending system in our country,” said Lopez