The P3 fund is designed to be lent out to micro enterprises with asset size not exceeding P3.0 million at not more than 2.5% per month all in interest rate and service charges. This 2.5% monthly cap is an effective rate, based on diminishing balance of the principal portion of the loan.
5/6 lending imposes an interest rate of at least 20% monthly and could go significantly higher given the weekly or daily collection schedule. The harsh lending environment is aggravated by the fact that 5/6 lenders are unregistered and without license to lend.
The Small Business Corporation (SB Corp) partnered with at least 227 microfinancing institutions (MFIs) and/or cooperatives throughout the country where the Corporation channels the funds allocated by the National Government for P3 (A complete list is available on the website www.sbgfc.org.ph). The micro entrepreneur will have to accomplish a loan application form issued by the MFI. He/She should have a government-issued ID, a Barangay Clearance in the past 3 months, Evidence of micro enterprise activity for at least one year (certification by LGU and/or other government offices is acceptable among others and proof of one (1) year residence.
Microenterprises wanting to borrow may also visit the nearest SB Corp Desk Office, SB Corp P3 Field office. DTI Negosyo Center, DTI Regional or Provincial Offices for assistance in identifying a nearest partner MFI.