Loan Portfolio

In response to the downward trend in the wholesale lending portfolio, SB Corp realigned its loan programs to focus more in direct/retail lending where it will have the most impact. The additional lending unit in Central Luzon and the more improved credit approval and releasing mechanisms for the MSME Retail Lending Program resulted to an increase in number of active borrowers. It also resulted to an increased share of retail loan in the Corporation’s total loan portfolio from 34% in 2014 to 47% by end-2015.

Cumulatively, SB Corp total loan releases to micro, small and medium enterprises reached P44.6 billion as of end-2015.

Total loan portfolio to micro, small and medium enterprises reached P2.6 billion as of end-2015. Loan portfolio in 2014 was recorded at P2.22 billion.

In 2015, SBCorp granted loans to 945 direct MSME borrowers with a total of P905 million, 25% of which or 238 are loans to new MSME borrowers amounting to P529 million.

However, bulk of the portfolio came from the microfinance wholesale with P1.18 billion originated through 92 partner finance institutions.

Enterprise Rehabilitation Financing Program, a disaster response program designed to put back on their feet enterprises stricken by natural calamities, especially those destroyed by typhoon Yolanda, reached P498.27 million.

Total number of retail lending clients in both the regular SME and ERF programs reached 1,874 in 2015 compared to 1, 279 in 2014.

Implementation of the Provisions of Republic Act No. 9501

To compel FIs to lend to MSMEs, the Magna Carta for MSMEs (R.A. 9501) mandates FIs to lend to MSMEs which amounts to about 10 percent of their loan portfolio. Those who cannot immediately comply with the mandatory lending to MSMEs may invest in alternative compliance instruments provided by SB Corp. Cumulative availments to the Corporation’s mandatory allocation instruments reached P18.76 billion as of 2015.

MSME notes availments in 2015 reached P1.2 billion. A total of 81 banks availed of the MSME notes, 63 of which are rural banks.

Proceeds from MSME Notes support the Corporation’s capacity building programs for MSMEs and financial institutions servicing MSME financing requirements.

Contribution to the Economy

Over a period of 25 years the Small Business Corporation (SB Corp) has remitted to the national government a total of P1.76 billion. This amount is equivalent to more than four times the initial P300 million investments made by the government to the Corporation through the Guarantee Fund for SMEs (GFSME), which was merged with SB Corp in 2001 and excludes the over P360 million dividend of the then GFSME to its mother agency.

The Corporation released P 1.2 billion in direct payments through taxes, guarantee fees, and dividends and P 574 million indirect payments through charges in borrowings and withholding taxes on placements.

For 2015, SB Corp has remitted a total of P 49.7 million in taxes and fees. This includes forex risk cover fee of P6.1million, guarantee fees amounting to P12.5 million, withholding taxes on placements at P19.6 million and taxes and licenses amounting to P11.5 million.

SB Corp operates through 5 area offices (South Luzon, Central Luzon, North Luzon, Visayas and Mindanao) and 13 desk offices strategically located in major business hubs in the country (Isabela, Dagupan, Bicol, Mindoro, Palawan, Pampanga, Laguna, Iloilo, Tacloban, Bacolod, Cagayan de Oro, General Santos City, Butuan).

Capacity Building

The Corporation has capacitated a total of 49 rural banks on the use of Risk-based lending technology through a consultancy program. The RBL technology provides banks the capacity to manage its credit risks to MSMEs through the use of risk rating tools and other credit risk management principles, and enables them to lend even without collateral. The RBL technology changes their mindset towards SME lending and provides greater financing access to MSMEs.

In 2015, SB Corp had 19 new enrolees under the RBL consultancy program.

In capacitating MSMEs, the Corporation also trained 66 enterprise owners under it’s Enterprise Enhancement Program (EEPro).

As a new addition to its capacity building programs, SB Corp. piloted its first module of MSME Loan Officers certification course to 25 Loan Officers. The 25 enrolees to the SME Business Specialist Certification Module consisted of Loan Officers both from the private banks and SB Corp. The SME Business Specialist Certification Module is part of a four-level ladderized certification program. Other modules are: SME Credit Analyst, SME Credit officer and SME Lending Strategist. The Certification Program addresses the need of FIs for the right competency for their staff.

Credit Rating

SB Corp maintained its issuer rating of PRS Aa minus (corp.) from Philippine Rating Services Corporation (PhilRatings).

A company rated PRS Aa minus (corp.) differs from the highest rated corporations only to a small degree, and has a strong capacity to meet its financial commitments relative to that of other Philippine corporates. A minus sign is included to further qualify the rating.

The rating assigned primarily considered the government’s supportive regulatory framework for growth and development of the MSME sector, as well as SB Corp’s sustained positive performance in terms of profitability.

ISO Certification and Balanced Scorecard

In October 2015, SBCorp was ISO 9001:2008 certified by TUV Rheinland for its core processes under the retail lending, credit guarantee and venture capital programs. The ISO certification was to improve the productivity of the organization and to have a more structured set of processes and guidelines to satisfy customer expectations. Part of the ISO certification was a continuous improvement of SB Corp.’s various processes and to enhance the quality of its products and services.

SBCorp. also accomplished 94% weighted score of its targets vis-à-vis the 2015 Performance Agreement between SBCorp and Governance Commission on GOCCs (GCG). The GCG is the government body mandated to monitor and evaluate the governance practice of Government Owned and Controlled Corporations. GCG also has oversight powers to set and review targets of the GOCCs. The objective is to ensure that GOCCs are performing well and according to their respective mandates.