Government MSMEs credit window lends P4.5B for 2016—DBP

The Industrial Guarantee and Loan Fund (IGLF), which the government uses to finance industrial projects and is managed by the Development Bank of the Philippines (DBP), reported P4.5 billion in loans released to micro, small and medium enterprises (MSMEs) last year. 

The amount surpassed the fund’s P4.1-billion year-end target. IGLF loans approved reached P4.6-billion, a DBP statement said.

Short-term loans to small borrowers accounted for 76 percent of total releases and approvals.

As of the end of December last year, IGLF’s total loan portfolio reached P5.6 billion, up by P1.1 billion or a 24 percent increase from the previous year’s P4.5 billion.

Wholesale lending to DBP-accredited participating financial institutions led the aggressive fund mobilization with conduits relending to MSMEs engaged in various economic activities such as hog farming, duck and poultry raising, retail sale of various items, and tricycles and other land transport operations.

The other loan growth came from retail lending through DBP’s Small and Medium Investment Loans for Entrepreneurs and different DBP branches in the countryside directly benefitting small businesses, involved in agribusiness, private education services, health care, tourism, food manufacturing and trading.

IGLF, a fund owned by the Republic of the Philippines represented by the National Economic and Development Authority (NEDA), is the longest running lending facility in the country that gives strong support to empower MSMEs by giving increased access to credit.

It aims to boost the Duterte administration’s thrust of continued growth momentum of MSMEs in the regional and rural areas, according to the DBP statement.

IGLF has continuously been searching for ways to expand its credit service to small borrowers that have significant impact on employment, income generation, and value-adding to indigenous resources, and that contribute to community welfare and development.

Meanwhile, in addition to its loan releases, IGLF has also been a main contributor to the Credit Surety Fund program approved by the Bangko Sentral ng Pilipinas (BSP).

IGLF’s performance continues to indicate favourable management of resources.

It has paid out almost all its foreign obligations to the World Bank, and with only the Asian Development Bank having a remaining balance of P305 million.

IGLF ended 2016 with a P104-million projected net income.

IGLF has raised the national government’s initial capital of P803 million to the current P6.8 billion.