GOV’T READIES P120 B LOAN GUARANTEES FOR MSMES

The government has readied a guarantee scheme on the working capital loans of MSMEs of up to P120 billion in a bid to jumpstart the economy.

Philippine Guarantee Corp. (Philguarantee) has been tapped to oversee the program that would assure banks and other financial institutions of at least a 50 percent guarantee on the loans they extend to MSMEs.

With the guarantee scheme,  the Department of Finance sees 12,000 small businesses benefitting from the program.

Earlier, the state-run Philguarantee has provided financial assistance such as moratoriums on loan payments and credit guarantees, alongside other relief and support measures for micro, small and medium enterprises (MSMEs)

The Philguarantee governing board, chaired by Finance Secretary Carlos Dominguez III, approved the credit guarantee scheme to cover an estimated P120-billion in working capital loans accessed by MSMEs.

The credit guarantees will help MSMEs overcome their economic difficulties resulting from the coronavirus-induced global health crisis.

The annual guarantee fee for the coverage is 1 percent of the guaranteed loan amount, with the usual origination fees waived under the program, according to Philguarantee.