Posted by: luvin | July 18, 2016

The Poor MSME

Helping the Poor or Funding the MSME, is quite interesting. 
 
For all and sundry, a dream to have and grow their own start ups is without doubt all embracing.
 
We all have heard how angel investors and venture capitalist have helped Facebook become what it is today. This is also true with Microsoft, Intel, Apple and many other giant firms today. Their early existence have been paved by the capitalist with the golden heart.
 
In the Philippines according to Philippines Statistics Authority, 99.6% of bussiness enterprise are MSME’s or micro, small and medium enterprises. The remaining .4% are the likes of PLDT, San Miguel Corporation, SM and other large corporation.
 
Among the 27 million poor Fiilipinos (26% of the population) are 942,925 MSME’s. The present administration is targeting a growth of about 8%. The most practical approach to achieve the growth is to continue with the macro economics espoused by the previous administration, with a caveat on inclusive growth.
 
The most common intervention is to identify poor communities and pour government resources with the hope of sustainability (because many of these high financed projects appears to only cause a Keynesian pump priming impact). Poor communities would tend to return to its original poor state after the interventions.
 
Looking at the MSME the assistance they got from the government in form of Capital infusion, technical support and the likes are pitiful to say the least. If each of the these MSME be provided an additional capital of about 3 million pesos each (of course this will be in form of loans), that would only be around 565,755 billion pesos, and it would have a direct impact on the 20% of the entire business environment. Assuming these micro entrepreneurs pays the loan in two to three years, the eight percent national growth target is achievable.
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