Major challenges hobbling MSMEs

Micro, small and medium enterprises (MSMEs) in the country have to deal with lack of an enabling environment, access to finance and markets and productivity, Rhodora Leaño, the director of the Department of Trade and Industry’s Bureau of Micro, Small and Medium Enterprise Development, said during a roundtable at The Manila Times on Friday.

Latest data from the Trade department showed that about 99.7 percent of the country’s businesses are SMEs.

Leaño said that while the government is trying to make inroads in developing MSMEs through the new Magna Carta on MSMEs, the government must focus on addressing roadblocks persistent in the country’s business environment.

For one, she added, local government units (LGUs) should streamline procedures in business permit applications. “It still takes a long time to register businesses, especially in LGUs. Procedures vary per LGU.”

To facilitate the registering of businesses, Leaño said that the Trade department is pushing for the eventual shift to a centralized Philippine Business Registry on the Internet.

But since many local units are still not “e-ready,” she added, the department is proposing that LGUs adopt a uniform business registration form, and a single system in processing applications.

Also, Leaño said that entrepreneurs should be informed that there is actually enough money available for lending to MSMEs, and that they should never be repelled by the rigid procedures one undergoes when borrowing from a financial institution.

“Many MSMEs find borrowing money from financial institutions strenuous as they have to comply with various requirements, fill up forms and, sometimes, they also don’t have collateral,” she added.

To address this, Leaño said that they are continuing to look for ways to further simplify the lending of money to entrepreneurs by both banks and nongovernment organizations.

MSMEs must also be supported through capacity and productivity building so that they can meet market demand and standards, she added.

Leaño noted that also sometimes, small enterprises could not supply the orders for their buyers, or their products or services do not meet the necessary quality specifications.

She said that her office is linking with other government bodies, such as the Department of Labor and Employment and the Department of Science and Technology, to train entrepreneurs and enhance their skills and capabilities, as well as assist them in improving their production.

The Trade department, Leaño added, is also looking for ways to complete value chains to ensure a steady source of raw materials for MSMEs. –Ben Arnold O. De Vera, Reporter, Manila Times