Some P8 million (US$145,000) from the Network Bank is available to small- and medium-size enterprises (SMEs) at low interest rates to fund cluster projects in the region. Merly Cruz, regional director of the Department of Trade and Industry (DTI), revealed that the total loan will serve as a guarantee mechanism for SMEs who cannot afford to give collateral.
The P2 million was originally funded by the Canadian International Development Agency (CIDA), with Network Bank acting as a conduit. After two years of successful operation wherein the bank generated a modest profit out of the seed money from CIDA, they decided to extend the guarantee mechanism.
"It's an in-house guarantee mechanism with an additional P6 million as back up guarantee mechanism," said Ms Cruz. She added that the P6 million will also be used for "re-lending" to the SMEs which fall under the priority clusters of wood, food, and agri-fishery identified by the DTI.
