House OKs micro financing program bill on 2nd reading

MANILA – A measure establishing a socialized microfinancing program for micro enterprises through the Pondo sa Pagbabago at Pag-asenso (P3) Program hurdled second reading approval at the House of Representatives.

During Wednesday’s plenary session, the chamber passed via voice vote House Bill 9433, or the proposed P3 Act, which aims to provide a better alternative to informal lenders or the so-called “5-6” money lending system availed by micro enterprises.

The bill mandates the creation of the P3 Fund, which shall be lent out to qualified micro enterprises through accredited partner financial institutions (PFIs) such as rural banks, thrift banks, development banks, cooperatives with license to end, non-stock savings and loan associations, microfinance non-government organizations or lending companies.

The Small Business Corporation (SB Corp.), the financing arm of the Department of Trade and Industry (DTI), shall be the lead implementing agency for the P3 Fund, which shall handle the fund delivery to micro enterprises through direct lending, and lending through accredited PFIs.

It allows the use of financial technology (fintech)-enabled systems and processes in the implementation of the P3 program.

It provides for the policies in the management and utilization of the P3 Fund, such as an interest rate of not more than 12 percent per annum, no collateral requirement, and a collection mechanism whereby payments may be made on a daily, weekly, or monthly basis, or depending on the livelihood project income cycle.