The Pondo sa Pagbabago at Pag-asenso (P3) Program is a P1 billion microfinancing scheme designed to support microenterprises across the Philippines.
Managed by the Small Business Corporation (SB Corp), the program distributes funds through accredited microfinance institutions (MFIs) such as cooperatives, non-bank financial institutions, and other associations.
The P3 Program aims to make financing accessible and affordable, providing essential support for business growth.
Target beneficiaries include Filipino microentrepreneurs like market vendors, sari-sari store owners, and stall owners who already have existing businesses.
Through this program, entrepreneurs can expect comprehensive loan features, including flexible repayment terms and low-interest rates, to help them scale their businesses and contribute to economic development.
P3 Program Overview
The P3 Program is a P1 billion microfinancing scheme designed to support microenterprises.
The funds are distributed through accredited microfinance institutions (MFIs) across the country.
These MFIs include cooperatives, non-bank financial institutions, and other associations that serve as conduits for the program.
By partnering with these MFIs, the program makes sure that funds are accessible to entrepreneurs in various regions.
Significance of the P3 Program
The P3 Program plays an important role in the Philippine economy by providing a sustainable and affordable financing option for microenterprises.
It helps to stabilize the informal lending market and protect entrepreneurs from high-interest, predatory loans.
The program’s accessible financing terms and comprehensive support structure empower micro and small entrepreneurs to scale their businesses and drive economic growth.
Program Impact
Since its launch, the P3 Program has made a significant impact on the microenterprise sector.
Over P8.65 billion in loans have been released to more than 220,000 borrowers since 2017.
This financial support has enabled many small businesses to grow, create jobs, and contribute to the local economy.
P3 Loan Features
The Pondo sa Pagbabago at Pag-asenso (P3) Program offers micro and small enterprises (MSEs) in the Philippines a range of beneficial loan features.
These features are designed to make financing accessible, affordable, and supportive of business growth.
Here’s an in-depth look at what the P3 Program provides:
Credit Line Amount
The loan amount is determined based on an assessment by SB Corp. This ascertains that the credit provided matches the specific needs and repayment capabilities of the microenterprise.
Credit Line Term
For new conduits, the credit line term is one year, subject to annual review. For existing conduits, the review occurs every two years. This periodic review helps maintain that the credit line remains suitable for the evolving needs of the business.
Promissory Note (PN) Term
The promissory note term can extend up to 24 months, providing flexibility for repayment. This longer-term repayment period helps reduce the financial burden on microenterprises.
Repayment Term
Repayments are scheduled quarterly. This allows businesses to manage their cash flow more effectively, making it easier to meet repayment obligations without disrupting daily operations.
Interest Rate
The program offers an interest-free period for the first year. For the second year, a nominal interest rate of 3.0% per annum is applied. This structure makes the loan highly affordable, especially compared to traditional lending rates.
Grace Period and Pre-payment Penalty
There is no grace period on principal payments, and there are no pre-payment penalties. Mentees can make simultaneous payments of principal and interest without incurring additional fees. Rebates may also be offered for early repayment, incentivizing prompt loan servicing.
Late Payment Penalty
A penalty fee of 0.5% per month is charged for late payments. This encourages timely repayments and helps maintain the program’s financial health.
Collateral Requirements
- No collateral is required for the P3 loans.
- This feature significantly lowers the barrier to entry for micro and small enterprises, which often lack the assets needed to secure traditional loans.
Service Fees
A minimal service fee of 2.75% is charged per availment. This fee helps cover administrative costs while keeping the overall cost of borrowing low.
Manner of Loan Release
Loans can be disbursed via bank transfer or check, depending on what is more convenient for the borrower. This flexibility keeps funds accessible in the most practical way for the business.
Schedule of Loan Release
- Advance Drawdown: Loan amounts not yet secured by sub-promissory notes (sub-PNs) of end-borrowers can be advanced, depending on the financial profile of the MFI. However, the MFI must not exceed 50% of the approved credit amount at any point.
- Rediscounting: Up to 100% of the appropriate credit line can be rediscounted, allowing MFIs to access additional funds based on the loans they have already disbursed.
Loan Features for Conduit to Microenterprise
Loan Limit
Microenterprises can borrow up to P300,000 from the end-borrower. This higher loan limit supports larger business investments and expansion efforts.
Manner of Loan Release
The release schedule and repayment terms are determined by the conduit, providing tailored financial solutions to meet the unique needs of each microenterprise.
Interest Rate and Service Fees
Interest rates and service fees are capped at a maximum of 2.5% per month or 30% per annum. This cap keeps loans affordable and helps prevent the financial strain associated with high-interest rates.
Beneficiaries
Target beneficiaries include microentrepreneurs such as market vendors, sari-sari store owners, and stall owners who are members of cooperatives and have existing businesses.
Eligibility Criteria
To qualify for a P3 loan, applicants must meet the following criteria:
- Business Status: The business must be a microenterprise as defined by the Magna Carta for MSMEs (assets not exceeding P3 million).
- Business Operation: The business must have been operating for at least one year.
- Registration and Documentation: The business must have a valid business permit, BMBE certificate, and BIR-filed financial statements showing positive net income for the prior year.
Application Process
Microenterprises can apply for the P3 loan by following these steps:
- Find an Accredited MFI: Locate a nearby accredited P3 conduit MFI branch. Over 250 MFIs are accredited by SB Corp to distribute P3 loans nationwide.
- Submit Required Documents: Provide the necessary documents including a completed loan application form, valid ID, business permit, BMBE certificate, BIR-filed financial statements, and photos of business assets.
- Loan Evaluation: The MFI will evaluate the application and creditworthiness. Approved applicants will be informed of the credit terms and schedule of releases.
- Loan Disbursement: Sign the documents and receive the credit proceeds via bank transfer or check.
Video: P3 MICRO BORROWERS EXPLAINER VIDEO
The “Pondo sa Pagbabago at Pag-Asenso” explainer video created by Small Business Corporation covers key information on the application process, eligibility criteria, and the various funding options available to support entrepreneurs in their journey towards progress and success. This video serves as a valuable resource for small business owners looking to expand their ventures and contribute to the economic advancement of the country.
Conclusion
The Pondo sa Pagbabago at Pag-asenso (P3) Program is an essential tool for empowering micro and small entrepreneurs in the Philippines. By providing affordable and accessible financing, the program helps businesses grow, creates jobs, and fosters economic development.
Join the P3 Program today and take the next step in growing your business!
Contact Information
For more details and assistance regarding the Pondo sa Pagbabago at Pag-asenso (P3) Program, please reach out to the Small Business Corporation (SB Corp) using the following contact information:
Address: Small Business Corporation (SB Corp)
17th & 18th Floors,
139 Corporate Center,
Valero St., Salcedo Village,
Makati City 1227, Philippines
Telephone: (632) 5 328 1100 to 10
(632) 5 328 1112 to 16
Local 1753 and 1731
Email: sbcorporation@sbcorp.gov.ph
For further inquiries or to apply for the P3 Program, you can visit the SB Corp website or contact the P3 hotline. SB Corp is committed to providing the necessary support and resources to help your business grow and succeed.