SME loan applications lower than expected

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THE NUMBER of small businesses applying for loans from the government remains low at about 1,000 a week, though the current average represents a significant improvement from initial numbers, the Department of Trade and Industry (DTI) said.

Trade Secretary Ramon M. Lopez said in a Viber message: “The loan take up has improved, from about 200 applications a week at the start, to 1,000 a week.  But we were expecting more applications than these numbers.”

The DTI’s Small Business Corp. (SB Corp.) was allocated P10 billion to lend to micro-, small-, and medium-sized enterprises by Republic Act No. 11494, the second stimulus package known as Bayanihan II, to assist businesses affected by the pandemic.

So far, the program has released loans worth P2.78 billion to 23,141 borrowers.

The department, Mr. Lopez said, has increased its processing capacity to around 4,000 applications per week.

Mr. Lopez has said that business confidence remains weak and may have dampened interest in taking on loans.

“This (program) also covers the tourism sector, kaya lang ang take up nung loan medyo mabagal din (Our take-up there has also been slow). Ang tingin natin, dahil nga limited din operation nila, wala rin humihiram in the meantime (Because their operations are limited, they are not borrowing),” he told ONE News on Thursday.

“‘Pag humiram sila at hindi maka-operate, mas delikadowala silang pambayad din dun sa hihiramin nila (It’s dangerous to borrow while you’re not operating because there are no funds to pay back the loan.”

Less than 10% of applications have come from the tourism sector, one of the industries most affected by the lockdown.

Mr. Lopez said that the government is looking at gradually easing restrictions to allow more “low-risk” businesses to operate. Metro Manila and nearby regions are on the strictest form of lockdown to arrest the surge in coronavirus disease 2019 (COVID-19) cases. — Jenina P. Ibañez

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