PRRDS MICRO FUND PROGRAM TO PILOT-RUN THIS

MONTHDTI
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Following President Rodrigo Dutertes directive to replace the 5-6 money lending
system and provide an affordable micro-financing for the countrys micro, small and
medium enterprises (MSMEs), the governments Pondo sa Pagbabago at Pag-asenso
(P3) program pilots this month in Mindoro, Sarangani and Leyte, among the top 30
poorest provinces, to represent Luzon, Visayas and Mindanao, the countrys trade chief
said.

The P3 is designed to bring down the interest rate at which micro-finance is made
available to micro enterprises, said Department of Trade and Industry (DTI) Secretary
Ramon Lopez.

The 2017 General Appropriations Act has included an initial funding of P1 billion for
financial assistance, a part of the planned P19 billion financing initiative for micro and
small businesses in the next five years.

Helping the poorest

The programs fund will be lent out in the business centers of the poorest provinces
(based on poverty incidence), where the participating microfinance institutions (MFIs)
and the Small Business Corporation (SB Corp.) can operate.

An attached agency of DTI, SB Corp. shall administer the P3 Program, including the
creation of a Program Management Office (PMO), which will open a separate back
account for the P3 Program, to oversee the management and monitoring of fund.

Fund delivery to microenterprises 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, Sec. Lopez said.

Beneficiaries
Priority beneficiaries include microenterprises and entrepreneurs that do not have easy
access to credit, or are accessing credit at very high cost, such as, micro-entrepreneurs,
market vendors, agri-businessmen and members of cooperatives, industry associations
and co-operators.

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

MFIs may opt for portfolio guarantee cover of up to 15% of their P3 loan portfolio from
SB Corp at a guarantee fee of 0.4%. The guarantee feature is seen to help MFIs
address the P3 Programs inherent risk. The guarantee fund will be sourced from the P3
fund.

P3 allocates PhP 100 million for direct lending by SB Corp. Target loan beneficiaries are
the small enterprises in priority and emerging industries, start-up businesses and
technology innovators.

Minimum loan amount will be Php 300,000.00 with interest rate capped at 10% p.a.,
with or without collateral cover.

This alternative funding dedicated for micro and small enterprises is meant to
discourage the 5-6 money lending system in our country, said Sec. Lopez, adding that
through the established MFIs, the government will reach even the smallest of
entrepreneurs in the country.

DTI AND SBC LAUNCH PONDO SA PAGBABAGO AT

PAG-ASENSO (P3) IN SOCCSKSARGEN
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Usec. Zenaida C. Maglaya of DTI Regional Operations Group urged the first and second
batch of beneficiaries to ensure the projects success by paying their loans on time so
the money paid can still be reloaned by them and others who need funding assistance
as well.

SOCCSKSARGEN - Alabel, Sarangani Province, on January 31, 2017, the Small

Business Corporation, an attached agency of the Department of Trade and Industry
(DTI) and the Regional Office of DTI 12 through the Office of the DTI Sarangani have
launched the Pondo sa Pagbabago at Pag-Asenso (P3) at the Alabel Gymnasium,
morning of the said date.

Undersecretary of the Department of Trade and Industry for Regional Operations Group
(DTI-ROG), Zenaida Cuison Maglaya and Mr. Brillo Reynes, President /CEO of the SB
Corporation graced the event as Guest Speakers.

Sarangani Governor Steve Chiongbian Solon, and some provincial officials as well as
regional DTI 12 officials, headed by Regional Director Ibrahim Guiamadel and other
national government agency officials as well as the media in the South Cotabato
Sarangani and General Santos City area were also present during the event. Alabel
Mayor Vic Salarda, who is currently in Japan, was represented by Municipal
Administrator Gerson Demaala.

Pondo sa Pagbabago at Pag-asenso or P3, as explained by SB Corporation President,

Mr. Brillo N. Reynes, is a funding program to provide microenterprises an alternative
source of financing that is easy to access and made available at a reasonable cost. This
program gives a boost to the development of the MSME sector, particularly the
microenterprises that comprise about 90% of registered enterprises in the country.

Reynes explained that P3 Program Funding is in line with the Presidents directive to
provide affordable micro-financing program for MSMEs. The d2017 General
Appropriations Act (GAA) included Php 1.0 Billion for financial assistance subsidy to
microenterprises under the P3 Program. Depending on the performance of this initial
funding, P3 may be scaled up and included in the GAA for subsequent years.

Usec. Zenaida C. Maglaya explained in her keynote speech addressed to the guests
particularly to the microenterprises and entrepreneurs, the main beneficiaries of the
program, that as the primary beneficiaries of the program, they no longer have to access
credit at very high interest because P3 is already here to provide assistance to their
financing needs at a very affordable interest rate. She identified market vendors,
agribusiness men and members of cooperatives, Industry associations and cooperators
as P3s target beneficiaries.

Addressing the crowd in Filipino, Maglaya also emphasized that, Dapat nating isaisip
na dahil ang pondong ito ay nanggagaling sa kaban ng ating bayan, ito ay dapat nating
bayaran sa tamang panahon, nang sa ganuon ito ay muli nating mahihiram at
maipapahiram pa sa iba pa nating mga kababayan na nangangailangan rin tulad natin.

Later, during the launching program, DTI and SB Corporation awarded loan certificates
to twelve initial beneficiaries amounting to P285,000 and another nine beneficiaries the
following day with a total of P190,000.00. Most of the loan beneficiaries are MSMEs
whose stalls are located in the Alabel Public Market.

The Small Business Corporation, an attached agency of the Department of Trade and
Industry (DTI) shall administer the P3 Program. Aside from creating a Program
Management Office to oversee the management and monitoring of the P3 Fund, SB
Corporation will make use of its lending network and the DTI Negosyo Centers in
reaching out to P3 beneficiaries. It shall manage the P3 Fund through separate books
(from SB Corporation proper) that will be subject to COA audit.
The Small Business Corporation (SB Corp) will deploy the P3 Fund through two modes
of delivery. The more extensive distribution system will be under wholesale lending
where SB Corp will partner with conduits. These are selected micro-finance institutions,
cooperatives, associations and other organizations. The other delivery mode is the
direct retail lending, this may include individual enterprise borrowers, start-ups and other
funding needs.

P3 Funds are still to be drawn from the Department of Budget and Management (DBM).
In the meantime, SB Corp will already be working out the operating mechanics with
some members of the Microfinance Council of the Philippines Inc. (MCPI) and of the
National Confederation of Cooperatives Inc. (NATCCO).

Loan amounts to end-borrowers will be in the range of P5,000 to P100,000, at a

maximum interest rate of 2.5% per month, with no collateral requirement. The rate
compares well with the 10-20% per month charged by other fund providers. Other
delivery mode is direct retail lending, limited by SB Corps reach and targeting more
specialized borrower segments so that this is only a small fraction of the P3 Funds. This
may include individual enterprise borrowers, start-ups and other funding needs that are
not usually responded to by formal sources of funds. P3 allocates P100 million for direct
lending by SB Corp. Target loan beneficiaries are the small enterprises in priority and
emerging industries, start-up businesses and technology innovators. Minimum loan
amount will be P300,000 with interest rate capped at 10% p.a., with or without collateral
cover.

http://www.dti.gov.ph/media/latest-news/10124-dti-and-sbc-launch-pondo-sa-
pagbabago-at-pag-asenso-p3-in-soccsksargen
http://www.dti.gov.ph/media/latest-news/10055-prrd-s-micro-fund-program-to-pilot-
run-this-month-dti

Government sets up P1-B fund to kill 5-6

By Richmond Mercurio (The Philippine Star) | Updated November 29, 2016 - 12:00am

11 10.7K googleplus2 6
Lopez

MANILA, Philippines - In a move to kill the 5-6 money lending system in the country, the government is
making available starting next year an initial P1 billion funding for micro and small enterprises.

The P1 billion fund is part of a planned P19 billion financing which the government wants to provide the
countrys micro and small businesses in the coming years.

We are trying to remove and kill the 5-6 industry. We are replacing this with an alternative micro funding. So
far we are able to set aside P1 billion new funds. Its a project of President Duterte to really provide startup
funds for the micro entrepreneurs, Trade Secretary Ramon Lopez said yesterday.

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President Duterte had earlier warned that loan sharks or those lending money under the 5-6 scheme would not
be allowed to operate under his administration.

As a replacement to 5-6, everything will be the same (in this program) except for the 5-6. In everything I mean
accessibility, no collateral, ease of getting the funding, and of course we have to make sure collection will be
undertaken so we will have to make use of existing, tried and tested micro financing institutions to partner with
us and to implement this project with, Lopez said.

The Trade chief stressed the program, which would be called Pondo Para sa Pagbabago at Pag-asenso,
would also offer lower interest rates than the 20 percent under the current 5-6 scheme.

Lopez said about five or six established microfinance institutions are being eyed to be part of the program.

He said through the help of these established microfinance institutions, the government fund would be
accessed even by the smallest of entrepreneurs across the country.

That budget will go to a wholesale fund group, it may be SB Corp., and then that wholesale fund will now be
lent to about five to six micro finance institutions for eventual retailing. So the government conceptualizes the
program and we make them operate and implement it, just like a franchise, Lopez explained.

Lopez, however, said the P1 billion fund for next year is just a start, as the government is eyeing to allot P1
billion per region or a total P18 billion in the succeeding years.

If the initial P1 billion goes well, the idea is to make it P1 billion per region. So maybe in the next budget
season that is the what we will request, P18 billion just for funding. But thats down the road. Initially, we will
have to slowly see the market demand, he said.

Lopez said the P1 billion funding for next year would come from the Office of the President and not from the
Department of Trade and Industrys budget.

PONDO SA PAGBABAGO AT PAG-ASENSO

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Ano ang P3?

Bilang tugon sa direktiba ng Pangulo na maiangat ang MSME sector, nilikha ang
programang Pondo sa Pagbabago at Pag-asenso (P3) ng gobyerno. Ito ay
naglalayong tumulong sa mga maliliit na negosyante na humihiram sa kasalukuyan sa
5-6 lending para mapalago ang kanilang negosyo. Layunin nitong makapagbigay ng
alternatibong mapagkukunan ng karagdagang puhunan na:

Mas mabilis na pautang - isang araw ang pagproseso

Mas mababang interes - maximum 2.5% kada buwan
Magaan na pagbabayad - araw-araw/lingguhan ang koleksyon
Sino ang makikinabang sa P3?
Target ng programang ito na maabot ang mga maliit na negosyante tulad ng mga
nagtitinda sa palangke at sari-sari store owners na humihiram sa kasalukuyan sa 5-6
lending.

Magkano ang pwedeng utangin sa P3?

Para sa mga nagnanais na mapalaki ang kanilang negosyo, makakahiram nang
mula PhP5,000.00 hanggang PhP100,000.00 mula sa programa.

Saan pwedeng lumapit at mag-apply ng P3?

Upang lubos na maunawaan ang P3, pumunta sa pinakamalapit na Negosyo
Center para sa kaukulang payo.

Mula sa Negosyo Center, maaari nang pumunta sa mga partner conduits ng Small
Business Corporation (SB Corp) o sa mga accredited na lokal na kooperatiba at
organisasyon sa inyong lugar. Ang kumpletong listahan ay maaari ring makita
sa website ng SB Corp.

Conduits in the 30 Poorest Provinces:

Para sa karagdagang impormasyon, maaaring tumawag sa Small Business

Corporation P3 Hotline: (02)813.5711; (02)751.1888

Mag-email sa: sbcorporation@sbgfc.org.ph

Tumawag sa: DTI Direct: (02) 751.3330: (0917)834.3330

O bumisita sa Negosyo Center o DTI Office malapit sa inyong lugar.

SMALL BUSINESS CORPORATION:

North Luzon Area Office

2A 2/F Jesnor Bldg. 1, Carino cor. Otek Sts., Baguio City 2600 Philippines
Tel./Fax: (074) 424.7647
Mobile: (0949) 712.0802 - Smart; (0956) 688.9518 - Globe
Email: valbay@sbgfc.org.ph

Central Luzon Lending Unit

Unit 109, Fortune Square Bldg., McArthur Highway, Brgy. Saguin,
San Fernando City, Pampanga
Tel: (045) 455.1720 I F: (045) 455.2897
Mobile: (0928) 768.4674- Smart; (0956) 688.9496- Globe
Email: rnarciso@sbgfc.org.ph

Visayas Area Office

Unit 1003-A Keppel Center, Samar Loop cor. Rosales Ave.,
Cebu Business Park Cebu City 6000 Philippines
T: (032) 232.1200 ; (032) 415.8280
F: (032) 234.4500