Small Business Corporation is celebrating its 27th year as a GOCC and as the implementing agency of the access to MSME finance agenda under the Magna Carta.

President Duterte has strongly advocated for a stronger MSME as the solution to achieving a middle class economy for the country.  Thus, national government funding through SBCorp has been increased significantly starting 2017.

While the size of its resources has been limited in the early years, SBCorp has done its best to fulfil its mandate.  It has embarked on the path of a trailblazer with programs including the Enterprise Rehabilitation Financing for Yolanda-affected MSMEs, the Pondo sa Pagbabago at Pag-asenso as an anti-5/6 strategy, and investment financing to special communities engaged in entrepreneurship.  SBCorp has trained rural banks and its account officers on how to lend to MSMEs as well as trained MSMEs to bridge the information gap between lenders and borrowers for a reinforced environment of trust and confidence between the supply side and the demand side.

SBCorp has not stopped innovating and has adapted to the changing environment faced by the MSME sector.

Philippine Star caught up with SBCorp President and CEO Ma. Luna Cacanando for an interview.

1.For the past 27 years, what are the landmark projects that the agency has implemented?  How did these help improve the stability and sustainability of small businesses?

Since its creation in 1991, SBCorp has helped advocate the increased allocation of the country’s financial resources to MSME finance.Coverage of the first Magna Carta in 1991 was limited to “small enterprises”.This was expanded to cover “small and medium enterprises” in 1998, and the law eventually became Magna Carta for Micro, Small and Medium Enterprises in 2008.Under the Magna Carta, banks are required to allocate a certain percentage of their amount of lending to MSMEs.In the case of the 2008 amendment of the Magna Carta, banks had been required to lend at least 8% to micro and small enterprises and at least 2% to medium enterprises for the period 2008 up to 2018.Congress is reviewing the extension of this affirmative action in favour of MSMEs.

To date, SBCorp is the only government corporation mandated to wholly focus on MSME finance.SBCorp is differentiated from the banks in terms of target market, i.e. small businesses that are still young in their life as an enterprise and that do not have the required collateral.In times of deep impact calamities such as the Yolanda super typhoon and the Marawi war, SBCorp is mandated to respond by way of appropriate financing facilities that are of significantly low interest rate and of sufficient grace period in repayment schedule.

In 2014 and 2015, the national government issued P200.0 million in credit risk fund and P750.0 million in credit guarantee fund through SBCorp as lending support to Yolanda-affected MSMEs.Starting 2017, NG has issued through SBCorp at least P1.0 billion every year as lending support to micro enterprises plagued by 5/6 lenders.

The P1.0 billion a year fund is called Pondo Para sa Pagbabago at Pag-asenso.Congress has issued an endorsement to increase the allocation for this fund to P6.0 billion in 2019.

An important accomplishment in MSME development finance as implemented by SBCorp is having been able to prove that MSMEs do pay their loans.With proper credit evaluation and monitoring of the borrowers, loan default is kept within acceptable levels.

In order to scale up and mainstream MSME finance, SBCorp has been training account officers of rural banks under a certification program with the end of producing more AOs that are equipped in evaluating SME loans.


2. What are the most difficult challenges that hinder small Filipino entrepreneurs from striving in the business arena?  How do you help them with said problems?

Poverty in itself is a huge challenge faced by everyone in the lower economic class.  This difficulty is extended in the life of a micro entrepreneur who has barely enough savings to run the business on top of putting food on the table for the family. 

The most important step for an entrepreneur is to create and to harness the product and/or service that the business would like to sell to the market.  This involves a learning process including experimentation which entails cost. 

A second challenge is being able to scale up production which requires hiring and training of labor.  During the transition period, the small business will not have enough sales to pay for the right wages for its workers.

Government has responded to these challenges through microfinance, specifically the Pondo sa Pagbabago at Pag-asenso, through a whole range of trainings by DTI, through the roll-out of Shared Service Facilities and through the BMBE policy which exempts micro enterprises from paying minimum wage and income tax. 


3. For SBCorp, what are the challenges that you have to overcome in order to provide quality service to small Filipino entrepreneurs?

Development finance or MSME finance requires a unique set of skills on the part of SBCorp as a lender.  SBCorp started lending directly to MSMEs at a significant rate in 2003.  In the beginning, the frontline teams were inexperienced in the nuances of lending to pre-bankable enterprises.  Problems in collection of the MSME loans emerged, more as a result of operations risk on top of the usual credit risk. 

In 2005 and the next three years, SBCorp had the benefit of training and consultancy services by a number of overseas development agencies (ODA).  These helped SBCorp set up its risk management system inclusive of borrowing risk rating scorecards for small enterprises and for conduits, and helped SBCorp’s management and front-line teams to better understand the conceptual framework for MSME finance.  


4. What are the programs that you are currently implementing and how will it affect Filipino businesses?

SBCorp’s services today can be classified into four.

First is Direct Lending to duly registered MSMEs, where loans range from P200.0 thousand to P5.0 million and average loan size is P500.0 thousand.SBCorp now has 2,300 active MSME borrowers all over the country under this credit modality.

The second service of SBCorp is the Pondo sa Pagbabago at Pag-asenso (P3), where loans range from P5.0 thousand to P200.0 thousand.This fund is intended for micro enterprises (ME) with asset size not exceeding P3.0 million, inclusive of those not yet registered with the LGU or with DTI.MEs are most vulnerable to usurious, illegitimate 5/6 lenders.

In order to move P6.0 billion in P3 funds in 2019, SBCorp is completing the accreditation of at least 300 credit delivery partners (CDP) nationwide, targeting at least 3 CDPs per province.

Each P1.0 billion in P3 funds will support at least 40,000 MEs, spread out in all provinces of the country.For every P1.0 billion from the national government, each province should be allocated at least P10.0 million in P3 funds.

The third service of SBCorp is Capacity Building for partner financial institutions so that they can lend more to MSMEs.

The fourth intervention provided by SBCorp is Advocacy for MSME Finance, the goal of which is to “fight” for an increased shared for MSMEs in the allocation of the country’s national resources.This service finds expression in the laws developed and passed by Congress that are affirmative of the MSME sector inclusive of the annual budget or GAA.

Under the leadership of DTI Secretary Lopez, SBCorp chairs the Access to Finance Cluster of the MSME Development Council.  The mission of the Cluster is to “build consensus and capacity among public and private institutions that contribute to the development of MSME finance in the country by way of policy, standards and program implementation”.  The Cluster adopts a vision statement of “A truly responsive and inclusive development finance infrastructure shall have been instituted by 2022, resulting to an adequately financed MSME sector”.


5. Filipinos often have a negative notion on “borrowing”.  How do you educate the people about this?

The negative notion on “borrowing” probably arises from the reality of 5/6 financing.It is unregulated, the lenders do not have license to lend and they do not pay taxes to government.There are even reports of physical harm to the borrowers under this lending environment.Paying 20% interest rate for a month-long borrowing or worse for a one-week loan is in a way an act of desperation for an ME, where the ME ends up losing any chance for business growth as all his earnings goes to loan repayment, net of the daily needs of his family.

We need to educate and to equip our small businesses on how to source more appropriately priced loans.They need to start practising simple accounting of their sales and expenses, so that formal lenders can review their ability to pay.


6. Filipinos are often hesitant to start their own businesses because of financial risks.  How do you encourage Filipinos to overcome this idea?

To the contrary, study shows that Filipinos are risk takers.Among Asean countries, the Philippines rank one of the highest in rate of start up enterprises.The problem, however, is that we also rank highest in terms of mortality rate, meaning only a few get to hurdle the 40 months gestation period for an enterprise to be considered stable.


7. Many Filipinos are not financially literate.  What are your thoughts on this and how do you address this matter?

This is not necessarily true.Even MEs can run the numbers in their head.Same is true with farmers.They can intuitively compute how much they should sell their products and how much discount they can give their customers.The gap is in converting these computations into paper form and into accounting language.

SBCorp and the whole DTI family have put effort into this matter of financial literacy, so that MEs and small businesses can access finance from formal lenders.


8.  As we work our way towards Asean integration, how do we prepare or equip small business owners?

Our local MSMEs are seen to be the most vulnerable to the challenges arising from the integration as foreign players are allowed easier access to the Philippine markets.  Our regional neighbours have prepared their MSMEs through increased and cheaper financing, aggressive marketing and upscale in product design.  Our government is doing its best to provide services to our MSMEs at par or better than our counterparts.  We hope for the best and we continue to work hard in putting in place all the support that our MSMEs need.    



Micro entrepreneurs will be able to access P3 loans from more credit delivery partners (CDP) nationwide as the Small Business Corporation (SB Corp) partners with fintech company CRIF Corporation to manage the loan operating system for the accelerated delivery of the Pondo sa Pagbabago at Pag-asenso (P3) program.

SB Corp President and CEO Ma. Luna E. Cacanando said that a new P3 loaning scheme is under way, and it is intended to make the P3 funds more accessible to more micro enterprises in poor provinces and in other areas not yet sufficiently reached by formal lenders.

“The agreement with CRIF will make borrowing from P3 easier for the micro enterprise.    If in the previous P3 scheme, micro business owners get to borrow from cooperatives only if they are members, with the P3 scheme via fintech, borrowers can transact with any CDP.  The plan is to set up CDPs within an hour commute from the micro enterprise communities.  Moreover, the loan will be directly released to the debit card issued to the borrowers,” Cacanando explained.

Under the accelerated P3 loan scheme, CRIF will provide Loan Origination Service, Credit Information Service and Scoring Service.

Likewise, under this scheme, borrowers will have the choice to borrow from any CDP in their area and be assured of the maximum 2.5% per month interest rate as the Promissory Note will be between SB Corp and borrower, unlike before where some of the accredited financial institutions providing P3 loans impose additional fees.

Cacanando added that the new P3 program scheme will also prevent individuals and institutions from using the P3 program in activities other than entrepreneurship support.

Following President Rodrigo Duterte’s directive to replace the “5-6” money lending system, the P3 Program, a financing program with annual allocation of P1.0 billion from the national government, is intended to provide micro entrepreneurs an alternative source of financing that is easy to access at a reasonable interest rate, that is under a safe environment away from dubious practices of informal lenders, and that is sustainable as delinquent borrowers are effectively barred from borrowing the next loan cycle.

Cacanando said that through the P3 program, micro entrepreneurs can find relief from overly expensive borrowings and afford cost-efficient and affordable form of loan to help expand their businesses.  Under the P3 Program, a micro enterprise can borrow between P5,000 up to P200,000 depending on its business status and repayment capacity with no collateral requirement.  Interest rate and service fees, all in, do not exceed 2.5% monthly.

The accelerated P3 scheme via fintech is set to be launched in the fourth quarter of the year, with pilot testing support under way. 

Cacanando also encourages micro financing institutions to apply for accreditation with SBCorp as Credit Delivery Partners and help spur economic activity in the countryside.

“We are encouraging rural banks, credit cooperatives and private financing companies with lending license  to partner with us in  the nationwide delivery of P3 loans. Enabling our enterprising poor to help themselves will level the playing field and empower them to take advantage of the economic gains rallied by the entire government and by the President himself.” 

Small Business Corporation, at attached agency of the Department of Trade and Industry and  program implementor of the Pondo sa Pagbabago at Pag-asenso (P3) held a ceremonial signing for the first nine beneficiaries of the Equity/Investment Program for Microenterprises for the families of  wounded in action (WIA) or  killed in action (KIA) soldiers on February 13, 2018 at the AFP Medical Center Auditorium.


SB Corp has allotted P50 million  from P3 funds to provide microenterprise investments for families of KIA/WIAs from P50,000 to P100,000. The investment is interest free if paid within two years. If not, amortization will start on the third year with an interest of 2% per annum.


As of 9 February,  SB Corp  has released Php 902,000 in investments to 13 WIA/ KIA family beneficiaries.


One of the first batch of beneficiaries is Corporal Jayson Mante, 31,  who used the money in a school supplies store his family owns.


“ Malaking tulong po talaga itong tulong na dagdag puhunan sa negosyo namin. Dati po maliit lang yung tindahan namin. Di gaano napapansin. Ngayon marami na pong laman at meron na rin po kaming photocopying machine kaya  lumakas din po ang kita ng tindahan.” Corporal Mante said.


The others who also signed their investment agreements are Technical Sergeant Erlindo Agraviador, Staff Sergeant  Gilberto Oriel, Private First Class Arhenzen Waguiyon, Corporal Jhandy Arancillo, Staff Sergeant Peter Barros, S1UO Herbert Ryan Briz, Private First Class Joey Casto and Corporal Cris Jonathan Biznar.  They plan to use the money to supplement their existing businesses varying from  hog-raising, rice trading, food stalls and animal feeds retailing stores .


To date, SB Corp has approved a total of 43  applications with a total amount of Php 2.59 million. More than a hundred are in process and are expected to be released by end of February. Interviews and processing of applicants are still ongoing at V. Luna Medical Center.  SB Corp is hoping to release the full P50 million fund to deserving beneficiaries by the second quarter of 2018.


In the photo (seated left-right) are:  DTI Secretary Ramon L. Lopez; program beneficiaries TSG Erlindo  Agraviador and CPL Jayson Mante, SB Corp President and CEO Ma. Luna Cacanando. Witnessing the signing (from left to right) are: DTI Undersecretary Zenaida Maglaya, AFP Medical Center Chief Brig. Gen. Leo Torrelavega. DILG KIA-WIA Program Manager Jocelyn Cabana, DTI Assistant Secretary Ameenah Fajardo, DND Assistant Secretary Antonio Bautista and Ms. Corabeth Magkalas of DTI-BMSMED.



After the release of the first batch of Pondo sa Pagbabagao at Pag-asenso (P3) loans to micro entrepreneurs in Marawi City in December, Small Business Corporation (SB Corp) is set to release P2 million more in loans to 150 public market vendors and DTI Starter kit recipients.


Of the 150 processed P3 loan applications, 95 are public market vendors and 55 are business starter kit recipients from DTI Lanao del Norte.


In a ceremonial awarding ceremony held last January 30, 2018 in Brgy. Sagongsongan in Marawi City, President Rodrigo Duterte and DTI Secretary Ramon Lopez handed loan proceeds to five of the 150 beneficiaries.


Rocaya P. Macabanog, a 68-year old widow and a retired public school teacher who owns a three- storey building in Padian Market in Marawi City, a section in the city being called as ground zero. The first and second floor houses her appliance and electrical shop and third floor serves as her family’s residence. When the war broke on the first day of Ramadan she and her daughter fled to Manila where her brother, a  lawyer took them in.


After the war, she immediately made preaparations to return to Marawi but her brother was reluctant to let her go, insisting that she just stay with him in Manila.


“I want to go back. I was crying and  telling my brother that I will return home with or without his approval, Macabanog related.


With the P3 loan from SB Corp she was happy to start again. “It doesn't matter if it’s small compared to what I’ve lost. What is important is I have something to start with. Even my supplier in Cagayan de Oro City is willing to help me.”


As a guarentee for her loan even if it was not required Ms. Macabanog issued post dated checks to cover her monthly amortization for the loan.


“ I want to show my commitment to rebuild my business and to rise above and heal from this experience.” Ms. Macabanog concluded.



SB Corp is targetting1,000 micro enterprise beneficiaries in Marawi City until the first quarter of 2018. Borrowers are required to  present a certification from DTI that the borrower is a starter kit recipient, signed Promissory note and disclosure, P3 Application Form and Valid IDs of Principal and co-borrower.


The P3 program for Marawi will also provide credit risk support to microfinance institutions (MFIs) including rural banks who want to start lending to the Lanao del Sur area in exchange for their timely and quick response. Loan qualification criteria will be relaxed to support gradual normalization of MFI operations in Lanao del Sur and nearby provinces where the displaced microenterprises were  temporarily relocated.

Interested microenterprise owners may contact SB Corp P3 Marawi coordinators at   (088)291-8033,  09759062762,  or 09166620488.


DTI Lanao del sur Provincial Office- Marawi Negosyo Center will also be open to answer inquiries on the P3 Marawi.


 On the other hand the national P3 program has already accredited 127 microfinance institutions SB Corp accredited conduits are currently lending to almost 20,000 borrowers in 71 province nationwide.




In 2018, NG will add another P1.0 billion to the P3 fund in order to support more micro enterprises in growing their small business.

The P3 Program is implemented by NG through DTI’s attached agency, the Small Business Corporation which is a non-bank government financial institution mandated under R.A. 9501 to support solely micro, small and medium enterprises (MSME). 

The P3 Program is now in full swing.  To date, with the support of DTI regional and provincial offices, SBCorp has accredited a total of 94 micro finance institutions (MFI) plus another 45 MFIs in the pipeline.  Except for a handful of provinces yet to be served, the P3 Program is now rolled out throughout the entire country from north to south.

The majority of these MFIs are cooperatives which are self-help people’s organizations that have a good grasp of what their members need in order to grow their businesses.  A number of large MFIs including CARD have also given their support to the P3 Program for its timely scale up even in remote areas of the country.

Under the P3 Program, a micro enterprise can borrow between P5,000 up to P100,000 depending on its business need and repayment capacity.  Interest rate and service fees, all in, do not exceed 2.5% monthly which is a huge relief from the 20% monthly rate under the 5/6 system.  Documentation is simplified and processing time is reasonable, which makes P3 a worthy competitor to 5/6 lenders.

The DTI-SBCorp will be launching in early December 2017 a P3 facility for the constituents of Lanao del Sur, specifically for Marawi micro entrepreneurs displaced by the war.  For the period December 2017 up to April 2018, interest-free P3 loans will be lent out to the area targeting several public markets and beneficiaries of the starter livelihood kits being distributed by the DTI. In succeeding months, some form of interest rate shall be charged but still much lower than the 2.5% monthly rate, until the situation normalizes in the years to come.

For MFIs that want to start lending to the Lanao del Sur area in solidarity with the people of Marawi and of the entire province, the P3 Program will provide credit risk support to the MFI in exchange for their timely and quick response.  A DTI-SBCorp team will be housed at DTI-Marawi, which will also be supported by the staff housed in DTI-Cagayan de Oro.  All MFIs that would like to participate are invited to contact DTI and or SBCorp.

The SBCorp is called upon to search for, to accredit and to support (by way of capacity building trainings) at least five local MFIs per province in the coming years in order to ensure that all micro enterprises will have easy and reliable access to reasonably-priced credit within their own locality (total of 400 grassroots conduits targeted).  It is hoped that the P3 program of national government will encourage communities to organize themselves into cooperatives or other self-help units engaged in entrepreneurship.            

   The rural banking sector is also invited to support the P3 Program given its more than 2,000 branches nationwide, mostly rural based, which makes these small banks a potent force for scaling up P3 and for improving the fund channelling system and for making sure that the P3 fund reaches the micro enterprises in a timely and judicious manner. 



Rose Marie Obena of Tacloban City  began her process of moving on and re-building her life  after Typhoon Yolanda took all 17 members of her family and left her alone by re-opening her store the moment  the Tacloban Market was ready to operate again.

“Mag-isa na lang ako, wala umaasa at wala din maasahan. Ito (her store) na lang araw-araw na  kasama ko sa buhay.” said Obena.

From the day she started construction of the store and whenever she needed extra cash to buy merchandise to sell, Rose Marie would borrow from a “five-six” lender. 

“For a small-time market vendor who has to start from the bottom again after my first store was destroyed by the typhoon it is the easiest way to obtain capital. I have no personal documents, no collateral, no bank will loan to someone like me,” Obena lamented.

Obena, along with thousands  of others   rely on  and  has been at the mercy of enterprising lenders and loan sharks  in the country’s public markets for many years.  They charge an  oppressive interest of up to 20% monthly to borrowers, who end up buried in so much debt because they do not have any other choice.

Obena  was among the first batch of market vendors who were able to access a P3 loan. She used the P50,000 loan to expand her  store and to  buy a refrigerator to sell softdrinks.  After three months she was able to pay up and renew her loan.

“Nakaka-ipon na ako ngayon. Paunti-unti nakakapagtabi ma ako para sa sarili ko. Hindo katulad noon na ang kita araw-araw pambayad din ng utang araw-araw.” Obena said.


Hercolano Villasin, never though that at his age of 78 he will be able to loan and continue his dried fish business  which he  has been doing since he was in his teens,

“Nasanay na kami na ang kinikita namin sa pag-dadaing pinapa-ikot lang.Kung may kita, may pambili ng susunod na paninda, kung wala eh si wala talaga,” Villasin related.

Villasin and his wife has been relying on their income from selling dried fish to nearby markets as their main source of income.

“Our children have their own lives now and we don’t want to obligate them to support us. So as long as we are capable of earning on our own we will keep on doing so,”

Mr.Villasin accessed the P3 Program through the Fatima Multi-Purpose Cooperative (FATIMA MPC).  A credit cooperative which was started in March of 1996  by a few farmers who saw that a source of credit is a felt need among the  poor  folks   in Calubian, Leyte. To date, Fatima MPC has  8,138 active members in 27 municipalities of Leyte and managed a total asset of P191, 619,877.36.

“Hindi sya mahirap tulad ng inaasahan ko. Unang lapit meron agad. Pati pagbabayad madali din. Nilapitan ako ng account officer ng Fatima MPC at tuloy –tuloy na mula doon,”Mr.Villasin shared.

“Over and above all the economic gains is the dream of FATIMA MPC to contribute in  the development of its members and community,” FATIMA MPC – Carigara Manager, Valentin Tambis related.

Fatima MPC requires their P3 borrowers to become cooperative members so they can share in the benefits and privileges enjoyed by their regular members. Although the requirements are much relaxed  and the processing faster FATIMA MPC  do not want to compromise the  quality of their portfolio.

“We advocate the true concept of self-reliance and thrift, wise use of money and that group cooperation is still important in this age of materialism,” Mr. Tambis concluded.





The Government’s Pondo sa Pagbabago at Pag-asenso (P3) is now in full swing as the Small Business Corporation (SB Corp), an attached agency of the  Department of Trade and Industry (DTI) announced its partnership with three national and  local Microfinance Institutions (MFIs)  accredited to  lend out the P3 microfinance loans.


The P3 Program is a P1 billion microfinancing program designed in response to President Rodrigo Duterte’s directive to replace the “5-6” money lending system. The lending program is intended to give micro and small enterprises access to alternative source of financing that is affordable and easy to access. The program funds are being managed by the Small Business Corporation (SB Corp) mandated to provide financing and capacity building services to micro, small and medium enterprises (MSMEs). SB Corp as part of its mandate, accredits microfinance institutions such as cooperatives, non-bank microfinance institutions (MFI’s) and other associations to become partner conduits .


P3 funds are now available throughout the country through three national conduits : Radiowealth Finance Company Inc. (RFC), Taytay sa Kauswagan Inc. (TSKI), and Mindanao Alliance of Self-Help Societies -Southern Philippines Educational Cooperative Center (MASS-SPEC).


Microenterprises may approach any of these conduits’ selected branches (complete list is available on SB Corp website) and  borrow P5,000 to P100,000, at a maximum interest rate of 2.5% per month, with no collateral requirement. This rate compares well with the 10-20% per month charged by other loan providers.


P3 funds is also available through 36 accredited local microfinance conduits in the provinces of Aurora, Benguet, Tacloban, Occidental Mindoro, Saranggani and Misamis Oriental. 


Program expansion for the next tranches of P3 funds includes two more national conduit and 88 local conduits in the provinces of Abra, Apayao, Cagayan,Ifugao, Ilocos Sur, Isabela, Nueva Viscaya, Quirino, Nueva Ecija, Pampanga, Tarlac, Camarines Norte, Catanduanes, Cavite, Cebu, Iloilo, Agusan del Norte, Camiguin, Davao del Norte, Misamis Occidental, Zamboanga del Norte and Metro Manila.


Sb Corp is confident that by the end of the of the third quarter of 2017 it will be able to fully disburse  P 1 billion in loan to all of the country’s provinces with the help of these partner MFIs .