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Bill on loan program for MSMEs filed

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PHILSTAR

HOUSE SPEAKER Alan Peter S. Cayetano has filed a bill which aims to institutionalize a simplified loan program with low interest for micro, small, and medium enterprises (MSMEs) in the country.

Mr. Cayetano filed House Bill No. 5 or the “Puhunan, Tulungan, Kaunlaran Act of 2019.” It provides a loan program with much lower and affordable interest rates to prohibit enterprises from resorting to “5-6” lenders.

Under the proposed loan program, first time borrowers can loan P10,000; P30,000 for second time borrowers; and P250,000 for third time borrowers. Loan proceeds shall be exclusively used for capital.

Those applying for loans must be at least 18 years old, a member of registered cooperative or association, must bring a comprehensive feasibility study of the business proposal, and has attended a seminar organized by the Department of Trade and Industry.

The proposed measure also creates a comprehensive development and assistance program for MSMEs which will be tailored fit for each administrative region. It seeks to transform MSMEs into five-star businesses.

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The measure also mandates free technical and administrative support such as training on development skills, packaging and design, quality control, market promotion, and financial literacy.

Also, the five top-performing enterprises per size and category yearly in each region shall receive grants not less than 10% of their current capital.

Every medium-sized enterprise that evolves into a large enterprise through the help of the program shall also be eligible for a one-time grant of P25,000 for further business capitalization.

The current law that provides help to MSME is the Republic Act No. 10693 or “Microfinance NGOs Act” which encourages non-government organizations to provide microfinance services to MSMEs. — Vince Angelo C. Ferreras

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