PEOPLE who have no bank accounts but want to start a small business venture can now obtain government funding for it.
Finance Secretary Carlos Dominguez 3rd, Trade and Industry Secretary Ramon Lopez, and Social Welfare and Development Undersecretary Mae Fe Templa signed on Tuesday the Implementing Rules and Regulations (IRR) for Republic Act 10693 for providing needy people access to microfinance services and operations. The chairperson of the Securities and Exchange Commission,Teresita Herbosa, was also a signatory.
Also present at the signing were Senator Paolo Benigno Aquino 4th and Rep. Pablo Nava 3rd of the APPEND party list group, who were both instrumental in authoring their respective versions of the law in the Senate and the House of Representatives.
Under RA 10693, aspiring small entrepreneurs who do not have access to financial products and services can team up with accredited microfinance non-government organizations (NGOs) that will provide them with convenient, flexible and low-interest credit.
A key feature of RA 10693’s IRR is the set of guidelines on the creation of a Microfinance NGO Regulatory Council, which is tasked to accredit non-government organizations that provide financial products and services to small entrepreneurs.
An accredited microfinance NGO is eligible for preferential tax treatment of 2 percent tax—in lieu of national taxes—based on the respective gross receipts from microfinance operations.
This new law is in line with President Rodrigo Duterte’s 10-point socioeconomic agenda designed to sustain the economy’s high growth path and make its benefits felt by all Filipinos.
“By providing financial assistance to small entrepreneurs who would otherwise be turned away by financial institutions because of their perceived “unbankability,” the Duterte presidency would partly realize its electoral mandate of dispersing wealth and making growth inclusive,” Dominguez said.
Lopez said the law would “provide market access to small entrepreneurs and simplify the processes for them” in borrowing funds for their businesses.
Aquino said that with this support given by the law, microfinance NGOS can do their job better and the microfinance industry can help bring families out of poverty in a sustainable way.
Nava pointed out that the tax relief given to microfinance NGOs “would free more resources that they would otherwise use to pay for the VAT and the other taxes that the Bureau of Internal Revenue had previously imposed on them, to help more poor families gain access to credit facilities.”
Herbosa, on the other hand, said the law would help microfinance NGOs “lend to people who would like to engage in small businesses” such as “sari-sari stores, small parlors and other similar enterprises.”
Templa said the new law would provide the Department of Social Welfare and Development (DSWD) “with additional support in its ongoing efforts of improving sustainable livelihood programs of the DSWD,” especially for the ongoing Pantawid ng Pamilya Pilipino Program, the government’s conditional cash transfer program for the country’s poorest of the poor.
RA 10693 was signed into law by former president, Benigno Aquino 3rd on November 3, 2015.