Small Business Corporation’s  2007 income up by 46%

State-owned Small Business Corporation (SB Corporation) reported a record high 46.02% increase in its net income in 2007.

Unaudited financial statement of SB Corporation shows a record setting income of P93.6 million for the last year. This tops the corporation’s previous net income record posted at P 64.1 million in 2006.

The performance is a result of positive developments in the Corporation’s efforts to increase loan approvals and improve quality of loan portfolio.

Last year’s loan approval was at P3.8 billion in loans, enabling the Corporation to maintain its position as the 3rd biggest lender to SMEs among government financial institutions (GFIs), after Landbank of the Philippines (LPB) and Development Bank of the Philippines (DBP).

It’s loan portfolio quality on the other hand, as indicated by its past due level remains at a comfortable 6.97% over-all. This is comparable to industry standards of 8.5-14.7%. Such feat was sustained by the Corporation’s borrower risk rating (BRR) system. Developed with funding and technical assistance from the Asian Development Bank (ADB), the BRR system has helped SB Corporation identify and mitigate the areas of risk involved in extending financing to MSME clients. Each borrower was risk rated and each loan was managed and priced according to the risk level.

The Corporation’s revenue performance is also aided by the infusion of Official Development Assistance (ODA) funds from ADB, KfW and IFAD cumulatively valued at around P3 billion. With the three ODA loans, SB Corp. was in a better position to increase its loan originations and has become more aggressive in expanding its list of conduit-partners in SME lending.

For 2008, SBGFC is targeting to release a total of P4.7 billion in loans to various micro, small and medium-sized enterprises (MSMEs). The targeted figure is higher by around P1 billion compared to its lending performance last year and is 9% higher than SB Corporation’s commitment to the SULONG (government’s unified lending program for SMEs) target.