06 July 2020

Published also in Business Mirror

In an effort to help micro, small  and medium enterprises (MSMEs) find financing for their business, especially in the midst of the COVID-19 pandemic, the Department of Trade and Industry-Export Marketing Bureau (DTI-EMB) hosted a webinar, entitled “Financial Stimulus and Tools to Mitigate the Impact of Covid-19” on June 25, 2020.

“The government is aware of your plight when the pandemic started and has since made efforts to come up with financial programs to stimulate your businesses that would help you to be more resilient,” said Abdulgani M. Macatoman, DTI undersecretary for Trade Promotions, who delivered the opening remarks.

Speakers include Mr. Angelito Acupan, chief risk officer of the Small Business Corp. (SB Corp); Ms. Gay Santos, a financial inclusion specialist and advocate; and Ms. Maureen Ledesma, founder and chief executive officer of Vesl Pte. Ltd. Vesl is one of the start-ups supported by DTI-EMB through its Startup Pinay program.

Acupan gave updates about the Covid-19 Assistance to Restart Enterprises (CARES) Program of the SB Corp. The P1-billion program gives out business loans to micro and small enterprises affected by the Covid-19 pandemic. SB Corp. has since closed applications and is processing the 22,061 loan applications they received. When asked, the chief risk officer said that the reopening of the CARES program depends on the government allocating an additional budget for the program.

Meanwhile, SB Corp. has other programs like P3 Protect, a P50-million financing facility available for small and medium enterprise manufacturers of personal protective equipment, test kits, and Department of Health- accredited medicines. They also have P3 HEROES, a P100-million loan program to help repatriated overseas Filipino workers (OFWs) start their own business.

Santos gave an overview of the MSME financing landscape and said that 41.2 percent of adults have borrowed from family and friends compared to the 11 percent who borrowed through formal channels, according to the World Bank Global Findex Database of 2017. She said that “heavy reliance on family and friends on funding does not lead to a bankable footprint for MSMEs.”

Instead, she suggested to explore other options such as financial institutions; fintech alternative finance; developmental institutions and venture capitalists; and public funds via initial public offerings (IPOs). She cited SeedIn, Kiva, and SparkProject as some platforms to find financing.

Meanwhile, Ledesma recommended that exporters avail themselves of trade credit insurance to protect their businesses from insolvency, or bankruptcy, protracted default, and political risks.

Her startup, Vesl, is a platform that provides trade finance and trade credit insurance to MSMEs. What makes Vesl affordable, she shared, is that they offer a per invoice premium payment scheme instead of a $20,000 upfront fee charged by traditional trade credit insurers.

The webinar was part of the Philippine Export Competitiveness Program (PECP) of the DTI-EMB. The PECP is a series of talks geared to help exporters become globally competitive.