|
THE
government admitted that it cannot go all-out for micro,
small and medium enterprise (MSME) financing due to the
country’s current fiscal position and will have to rely
more on the private sector to provide lending at this
time.
Trade
Secretary Peter B. Favila said it is really the
intention of the administration to emulate the programs
for SME financing of other governments.
The
Taiwanese government, for instance, is matching 20
percent of the start-up capital of its SMEs as a form of
support, Favila said.
Given
the fiscal position of the country, however, Favila said
this cannot be done in the
Philippines yet.
“Probably once we have balanced the budget,” Favila
said.
The
administration, through fiscal discipline and
tax-collection efficiency, is targeting to balance the
budget by 2008.
At this
time, Favila said his plan is to talk to the private
financial institutions to give MSMEs more access to
financing.
“The
money is there [private sector]. We have to convince
them, that’s the best we can do at this point,” Favila
said.
Basing
on the recent study of the World Bank, however, Favila
is in for a tough task.
The WB’s
International Finance Corp. (IFC) said the annual volume
of unmet demand for SME loans “lies somewhere in the
range of P67 billion [$1.6 billion] to P180 billion
[$4.2 billion].”
Also,
the IFC study said 68 percent of SMEs have not had bank
financing over the past five years.
Favila
said aside from the private banks, the country’s
government financial institutions, including the
Development Bank of the Philippines and the Land Bank of
the Philippines, should also shore up their MSME
lending.
Considered as microenterprises are those with assets of
less than P3 million, while small and medium enterprises
have up to P3 million in assets.
Sergio
Ortiz-Luis, president of the Philippine Exporters
Confederation, said banks cannot be blamed for low
lending facility for MSMEs because aside from being
risky, MSME loans also entail just the same processing
cost as those of the big businesses. |
