Businesses in the Philippines to be granted more access to credit
To support government efforts to help small businesses in the Philippines, state-owned Philippine Guarantee Corporation (Philguarantee) has agreed to back loans of six banks worth 10.2 billion pesos for micro, small and medium-sized enterprises (MSMEs).
These will provide partial guarantee cover for MSME loans in the event that they cannot be paid back, and follows up on the 37.5 billion pesos in credit guarantees that Philguarantee has already approved in the first half of 2020 for 22 accredited banks.
“We are processing accreditation of more banks to have broader channels of credit support to MSMEs, which would ensure a nationwide reach,” Philguarantee said.
For instance, some 5.5 billion pesos in credit guarantees was extended in the first quarter of 2020 to 35 lending institutions in the agriculture sector, which Philguarantee said will benefit more than 31,000 workers in the sector.
The agency is targeting to provide 50% guarantee cover to at least 12,000 MSMEs in the Philippines who have seen business adversely impacted by the COVID-19 pandemic. Nationwide, the government has earmarked 120 billion pesos for a credit guarantee programme that aims to help small businesses gain access to loans for working capital.