The Small Business Corporation
Small Business Corporation (SBCorp) is the result of the merger between the Small Business Guarantee and Finance Corporation (SBGFC) and the Guarantee Fund for SMEs (GFSME), under Executive Order No. 98 issued in November 2001. SB Corp’s focus is to provide access to finance, financial management and capacity building to MSMEs. It has several programs for the MSME market: wholesale lending to smaller financial institutions, cooperatives and foundations; retail or direct lending to micro, small and medium enterprises (MSMEs); and guarantee programs for larger banks to cover MSME loans without collateral or with insufficient collateral. SB Corp also provides financial management and capacity building for rural banks (RBs) with its (SB Corp) Borrower Risk Rating (BRR) System program.
Programs and Program Beneficiaries
Corporate Funded Programs
Using its own corporate funds, SBCorp is engaged in a) Regular Retail Lending for duly registered MSMEs and b) Venture Capital for selected start-up MSMEs. The two financing programs are consistent with the policy statement that SB Corp shall not duplicate existing financing interventions available in the market.
Program: Regular Retail Lending
Priority Beneficiaries: Targeted Micro and Small Enterprise Markets
Program: Venture Capital Program
Priority Beneficiaries: Selected Start-up MSMES thru Partner State Universities and Colleges
Program: Capacity Building Programs
Priority Beneficiaries: Targeted Financing Institutions
National Government- Supported Programs
Program: Enterprise Rehabilitation Financing
Priority Beneficiaries: MSMEs who suffered business reversal from calamity
The program was initially funded by corporate funds when it started in January 2014. SB Corp allotted around P 600 million in support of MSMEs badly affected by Typhoon Yolanda
In response the National Government (NG) granted P200 million credit risk subsidy to SB Corp.
Program: Pondo sa Pagbabago at Pag-asenso (P3)
Priority Beneficiaries: Microenterprises who are economically active
The National Government implemented its P3 Fund for microenterprises (MEs) starting 2017 via a GAA allocation for SB Corp.
The strategic objective is to provide all MEs that are economically active in all 81 provinces throughout the country, the opportunity to access credit at more reasonable interest rates capped at 2.5% per month.
Not more than 5% of the P3 fund was allocated to higher risk sectors such as internally displaced persons (IDPs) arising from war in Marawi, killed and wounded in action (KIA/WIA) soldiers or their families, MSMEs affected by the temporary closure of Boracay Island and MEs affected by earthquake in Batanes.
Ownership and Legal Status
SB Corp is a government corporation created on January 24, 1991 by virtue of Section 11 of RA No. 6977, amended on May 6, 1997 by RA 8289, otherwise known as the Magna Carta for Small and Medium Enterprises. SBGFC is under the policy program and administrative supervision of the Small and Medium Enterprise Development (SMED) Council of the Department of Trade and Industry (DTI), the primary agency responsible for small and medium enterprises in the country.