Let them grow

Why aren't banks lending more money to micro, small and medium enterprises (MSMEs) in the country?

That's because most banks would rather open their credit windows to large enterprises in the belief that only these are capable of repaying their loans on time.

MSMEs, however, actually make up the bulk of the Philippine economy.

Department of Trade and Industry figures indicate there are at least 944,897 business enterprises operating in the Philippines.

Of these, 99.58 percent are micro, small, and medium enterprises and the remaining 0.42 percent are large enterprises.

MSMEs generated a total of 4,930,851 jobs in 2012 versus 2,658,740 for the large enterprises.

This indicates that MSMEs contributed almost 65 percent of the total jobs generated by all types of business establishments.

But there's hope in the horizon for MSMEs. According to the Bangko Sentral ng Pilipinas, its Credit Surety Fund (CSF) program has already helped 14,661 MSMEs secure a total of P2.03 billion from banks as of end September.

The CSF Program was begun in August 2008 to help MSMEs who need to expand their operations but cannot access bank credit due to lack of acceptable collaterals and credit information.

Now on its seventh year, the CSF program has been established in 30 provinces and 14 cities nationwide.

Pending in Congress is a consolidated bill that would make the CSF program operational in more provinces and cities nationwide. If enacted into law, this would allow more MSMEs to generate more jobs that would benefit the economy as a whole.

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