A federation of Indian chambers of commerce appealed to President Rodrigo Duterte to legalize money lenders and their businesses in the country.
“I spoke to President Duterte and I appealed to him to legalize the money lenders and their businesses. They have no formal registration and that’s really the problem,” Rex Daryanani, president of the Federation of Indian Chambers of Commerce (Phil.), Inc. said on Thursday.
Daryanani added, “One of the chamber’s goal is to eliminate the term ‘5-6’. It has become a brand today and it has a negative connotation.”
The “5-6” term refers to the 20 percent interest on loans charged by the Indian money lenders.
The federation has spoken to the leaders of all the money lenders in the country, mostly Indians.
“We don’t know exactly, but rough estimate is 25,000 to 30,000 lenders. If you put at P1 million each that they are lending out, that’s P30 billion that you’re going to suck out of the sytem if you start arresting these people and the banks are not able to take their place,” Daryanani said.
The president has already given the go signal to legalize them, he added.
“We have initial guidelines but they still for polishing, so we’re hoping that by early March we will already have them ready. “ Daryanani said.
“The Indian Chamber today is a much more engaged business organization. As a business group we find it very important and critical that we partner actively with government,” he added.
Following President Duterte’s directive to replace the “5-6” money lending system and provide affordable micro-financing for the country’s micro, small and medium enterprises (MSMEs), the government’s Pondo sa Pagbabago at Pag-asenso (P3) program pilots this month in Mindoro, Sarangani and Leyte, among the top 30 poorest provinces, to represent Luzon, Visayas and Mindanao, Trade Secretary Ramon Lopez said.
“The P3 is designed to bring down the interest rate at which micro-finance is made available to micro enterprises,” Lopez added.
The 2017 General Appropriations Act has included an initial funding of P1 billion for financial assistance, a part of the planned P19 billion financing initiative for micro and small businesses in the next five years.