THE Department of Trade and Industry (DTI) is calling for an interagency meeting to work on the transition for underground money lenders who are mostly foreigners to legalize their resident status and register with the Securities and Exchange Commission (SEC).
The move is in line with government’s drive to reform the micro-financing system in the country.
“After the prescribed transition period, 5-6 scheme must stop and micro businesses must shift to P3 and other legal microfinancing facilities,” said Trade Secretary Ramon Lopez. P3 is the flagship microfinancing initiative Pondo Para sa Pagbabago at Pag-asenso, initiated by President Rodrigo Duterte.
Lopez, SEC Chair Teresita Herbosa and representatives of the Departments of Justice and of Foreign Affairs, Bureau of Immigration, National Intelligence Coordinating Agency, Bangko Sentral ng Pilipinas, Philippine National Police, Small Business Corp. (SB Corp.) and the Indian Chamber of Commerce Philippines met to discuss how to legalize underground lending businesses and the initial steps to the scheme.
The value of the “5-6” lending system is estimated at P2.4 billion, with 30,000 operators across the country, according to the chamber. Lending operators will be given a transition period to register their businesses with SEC.
Launched in Tacloban, Occidental Mindoro and Sarangani, the P1-billion microfinancing program aims to provide micro, small and medium enterprises with easy access to finance with minimal interest and no collateral through micro-financing institutions (MFIs) and cooperatives accredited by the DTI and SB Corp.
“We should be seeking the frontiers, these people who have not been reached by the MFIs are the same people targeted by the ‘5-6’,” Lopez noted.
A Technical Working Group (TWG) will provide specific guidelines on compliance and registration.
Indian Chamber of Commerce President Rex Daryanani is hoping that the term “5-6” would eventually be eradicated and be replaced by “microfinancing.”