A BILL seeking to promote the growth of Philippine micro, small, and medium enterprises (MSMEs) by providing them with interest-free loans was filed at the House of Representatives last month.

House Bill (HB) No. 11212, filed by Zamboanga City Rep. Khymer Adan T. Olaso, mandated the Development Bank of the Philippines (DBP) and Landbank of the Philippines (LANDBANK) to provide zero-interest loans with minimal collateral requirements to MSMEs.

Small-scale businesses must be registered with the Trade department and the Securities commission and have operated for at least six months to be eligible for a loan. They must also demonstrate the capacity to pay off the loaned amount through “reliable projected revenue streams.”

Micro enterprises could loan up to P500,000, with small businesses allowed to borrow for up to P2 million. Medium industries could lend a maximum of P5 million.

Repayment of the loaned amount could range between one to five years, with “borrowers entitled to a grace period of up to six months before repayment begins.”

“This bill seeks to address these pressing issues by institutionalizing a zero-interest loan program tailored for MSMEs. The program will enhance their financial capacity, promote entrepreneurial innovation, and enable them to scale operations,” the bill’s explanatory note stated.

“By eliminating interest charges, the government effectively reduces the cost of capital, making it accessible to small entrepreneurs who traditionally face financial exclusion,” it added. — Kenneth Christiane L. Basilio