ROXAS HOPEFUL THAT NEW LAW FOR MSMEs WILL BE IMPLEMENTED PROPERLY
MORE CREDIT ACCESS, GOV'T SUPPORT FOR SMALL ENTREPRENEURS

Senator Mar Roxas, Chairman of the Senate Committee on Trade and Commerce, welcomed the early enactment of a measure that seeks to strengthen financial and other support mechanisms for small entrepreneurs.

"After this much-awaited law has taken effect, I look forward to the executive's proper implementation of this law that would give our small entrepreneurs more tools to grow their businesses and employ more workers," the primary author of the Magna Carta for Micro, Small and Medium Enterprises (MSMEs) said.

"MSMEs comprise over 90% of enterprises and employ 70% of the workforce, but their potential to effect meaningful change for our countrymen has yet to be realized. With this law, we would like to see them increase their contribution to the economy from their 30% gross value added at present," he added.

The new law seeks to address the primary problem experienced by MSMEs--lack of capital and access to credit--and strengthen the support mechanisms as provided in the present Magna Carta for Small and Medium Enterprises.

It requires banks and other lending institutions to allocate at least 10% of their loan portfolio to small entrepreneurs: 8% to micro and small businesses, and 2% to medium enterprises. The present law requires only a total of 8% of lenders' loan portfolio to MSMEs.

It also gives the Small Business Corp.--the government financial institution focused on assisting MSMEs--more muscle to help MSMEs through an increase of its authorized capital stock to P10 billion, for the implementation of its programs assisting MSMEs.

Under the MSME Magna Carta, the definition of micro, small and medium businesses is also adjusted. Micro enterprises will be those which have total assets worth not more than P3 million, from the previous threshold of P1.5 million. Small enterprises will be those with total assets worth P3 million to not more than P15 million, and medium enterprises are those with total assets worth P15 million to not more than P100 million, from the previous threshold amount of P60 million.

Roxas noted that the bill had been prioritized during previous meetings of the Legislative Executive Development Advisory Council.