THE Small Business Corporation (SB Corp.) has tied up with the Land Bank of the Philippines (LANDBANK) to offer an e-payment service to mostly benefit micro, small and medium enterprises (MSMEs) in rural areas.
Under the memorandum of agreement, SB Corp. will avail of Landbank’s e-payment facility under its payment service provider (PSP) as part of its efforts to provide fast and efficient payment collection services for MSMEs.
For its part Landbank, through its Link.BizPortal, will allow SB Corp. clients to transact business or pay monetary obligations to SB Corp. via the internet using any e-payment models offered by the bank.
Aside from streamlining the payment transaction, Landbank’s online portal minimizes the direct and indirect costs associated with physical cash or distribution of in-kind goods. The system also offers maximum secure security for both small and large value payments.
SB Corp. President and Chief Executive Officer Ma. Luna E. Cacanando said the agreement would help beneficiaries of the Pondo sa Pagbabago at Pag-asenso (P3) who face problems in producing a valid identification card to avail of the lending program’s benefits.
“Because, most of our clients in the P3 program are having difficulty in producing a valid identification card, we need a fintech solution and this partnership with Landbank to make documentation easier,” Ms. Cacanando said in statement on Monday.
P3 is intended to give micro enterprises better access to finance, providing them an alternative to the informal or “5-6” lending scheme.
The loanable amount per borrower can range from P5,000 to P300,000, with a maximum interest rate of 26% per annum and without collateral requirement. The rate is lower than the 20% per day, week or month charged by “5-6” lenders. It is also lower than the interest imposed by microfinancing institutions.
The program’s target loan beneficiaries are small enterprises in priority and emerging industries, start-up businesses and technology innovators.
The Department of Trade and Industry, under which the SB. Corp. is attached, estimated last year that informal lenders had so far collected some P30 billion nationwide. — Janina C. Lim