Let’s say you were able to put up a sari-sari store, thanks to the additional income you earned abroad. So far, it is going well until tragedy struck. You don’t want to let go of that store because somehow, it helps you in augmenting expenses back home.
What do you do then? You plan to borrow money.
Unfortunately, banks ask a lot of documents to prove that you are capable to pay. Some may not even accommodate you because you don’t have an account with them. Because you really need additional funds to ensure continuity of your business, you decide to borrow from 5-6 lenders.
Here’s the thing: 5-6 lenders could drown you in debt, no thanks to their sky-high interest rates and unreasonable loan terms. Since you need the funds, you can’t say no.
The good news the government could help. This year and per President Rodrigo Duterte’s directive to replace 5-6 lending scheme, the Department of Trade and Industry (DTI) launched the P3 Program.
What is the P3 Program all about?
P3 stands for Pondo sa Pagbabago at Pag-asenso. It aims not only to replace the 5-6 lending scheme but also and more importantly, to provide an affordable micro-financing facility to the Filipinos.
DTI’s P3 Program fund will be coursed through to business centers where micro-finance institutions (MFIs) and Small Business Corp. (SB Corp., which is an attached agency of DTI) may operate.
Apparently, not everyone is qualified. P3 Program prioritizes micro, small, and medium enterprises from the poorest provinces in the Philippines and have no or having difficulty in accessing credit. This means only those with asset size of not more than P3 million are considered as micro-entrepreneurs.
Who are considered as micro-entrepreneurs?
They are but not limited to:
- Market vendors
- Members of cooperatives, industry associations, or co-operators
- Sari-sari store owners
- Stall owners
In other words, only micro-entrepreneurs engaging in a legitimate livelihood or business activity may borrow from the P3 program.
Terms of P3 Program
- Loanable Amount: P5,000 to P200,000, depending on the lender’s capacity to pay and size of the business
- Interest Rate: maximum of 26 percent per annum or 2.5 percent per month (5-6 lenders charge more than 20 percent per day, week, or month)
- Loan Purpose: for business purposes ONLY wherein the funds will be used for expansion and/or purchase of additional suppliies
- No collateral requirement, which means you could borrow money even if you don’t have an asset
P3 Loan Requirements
- Duly accomplished loan application form
- ID picture
- Photocopy of any government-issued ID
- Barangay Clearance, which must be issued at least three months prior to application
- Evidence that the micro-entrepreneur is engaged in a legitimate business for at least one year such as Certification from the Local Government Unit
- Proof of residence for at least one year
- Business Name Registration from DTI (for loans above P50,000)
How to Apply for P3 Program
SB Corp. partnered with hundreds of micro-finance institutions