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MSMEs reluctant to borrow due to low confidence in economy says lending agency

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ABS-CBN News

<div class="embed-wrap"><figure data-feedback="fb:likes,fb:comments"><img src="http://sa.kapamilya.com/absnews/abscbnnews/media/2021/business/02/17/20210211-binondo-dragon-dancers-gc-3780.jpg?ext=.jpg"/><figcaption>43-year-old Robert Sicat applies paint to costumes inside their home in Binondo, Manila on February 11, 2021. The Philippine Binondo Phoenix Dragon and Lion Dance group which is managed by Robert and his brothers have seen a huge decline in their business since the start of the community quarantines last year. <em>George Calvelo, ABS-CBN News</em></figcaption></figure></div><p>MANILA - Medium, small and micro enterprises (MSMEs) are reluctant to borrow even at concessional rates due to worries over the health of the economy amid the COVID-19 crisis, a government agency tasked to help ailing small businesses said on Wednesday. </p><p>The Small Business Corp (SB Corp) said the number of MSMEs that availed of their loans dropped by more than two-thirds from around 17,000 under Bayanihan 1 to around 5,000 under Bayanihan 2. </p><p>Azel Solano, SB Corp’s chief of media communication, said lack of confidence in the economy was the biggest factor for businesses deciding against borrowing.</p><p>&quot;Siyempre (Of course) they want to be responsible businessmen, they do not want to take out a loan kung hindi naman sila makakabayad (if they can’t pay),” Solano said. </p><p>Another reason for the slower lending uptake was the online processing of loan applications, which may be deterring applicants, Solano said.. </p><p>“Medyo marami pa rin tayong negosyante na nahihirapan na mag-access sa internet for example, o maintindihan ang loan processing, because they will have to scan and upload their documents online.&quot;</p><p>(We still have a lot of businessmen who find it difficult to access the internet, for example, or understand the loan processing because they will have to scan and upload their documents online.)</p><p>SB Corp was given a budget of P8 billion to help MSMEs that were hit hard by the pandemic. Solano said the agency is looking to help up to 60,000 MSMEs this year.</p><p>The agency allows businesses with assets of P50,000 to P100,000,000 to avail of zero interest loans, requiring no collateral, with a grace period of up to 12 months, and terms of up to 4 years. </p><p>An estimated <a href="https://news.abs-cbn.com/business/09/28/20/number-of-closed-businesses-closure-affected-covid19-coronavirus-disease-pandemic-philippines">90,000 businesses</a>, mostly MSMEs remained closed as of September last year because of the pandemic. </p><p>A study published in November last year also said that <a href="https://news.abs-cbn.com/business/11/18/20/pandemic-pushing-9-pct-of-ph-firms-to-consider-permanent-closure-survey">9 percent</a> of businesses were considering permanent closure because of the pandemic. </p><div><strong>- Report from Warren de Guzman, ABS-CBN News</strong></div><figure class="op-interactive"><iframe height="315" src="https://www.youtube.com/embed/TuAJ1S4oCfo?enablejsapi=1" width="560"></iframe></figure><div class="iwantbar">Watch more in <a href="//www.iwantv.com.ph/">iWantv</a> or <a href="//tfc.tv/">TFC.tv</a></div>

<p>Medium, small and micro enterprises (MSMEs) are reluctant to borrow even at concessional rates due to worries over the health of the economy amid the COVID-19 crisis, a government agency tasked to help ailing small businesses said on Wednesday. </p>

Medium, small and micro enterprises (MSMEs) are reluctant to borrow even at concessional rates due to worries over the health of the economy amid the COVID-19 crisis, a government agency tasked to help ailing small businesses said on Wednesday.