LOCAL ‘5-6’ lenders from the Indian community in Pangasinan have been given a grace period to register their micro-financing business activities.
The Department of Trade and Industry (DTI) announced a transition period within which illegal foreign money lenders to legalize their resident status and register their lending business with the Securities and Exchange Commission (SEC).
The transition period was agreed upon to prevent undue harassment of concerned lenders.
The total operation value of the “5-6” lending system in the country sums up to P2.4 billion, with 30,000 operators across the country, according to the Indian Chamber of Commerce Philippines.
“After the prescribed transition period, 5-6 scheme must stop and micro-businesses must shift to Pondo Para sa Pagbabago at Pag-asenso or P3,” said DTI Sec. Ramon Lopez, referring to the government’s flagship micro-financing initiative, initiated by President Duterte.
Those who continue to operate illegal lending after the grace period will be arrested for violating laws on lending and immigration.
Launched in Tacloban, Occidental Mindoro and Sarangani, the 1-billion micro-financing program aims to provide micro, small and medium enterprises (MSMEs) with easy access to finance with no collateral and minimal interest, through micro-financing institutions (MFIs) and cooperatives accredited by DTI and the SB Corp.
“We should be seeking the frontiers, these people who have not been reached by the MFIs are the same people targeted by the ‘5-6’,” Sec. Lopez added.
Indian Chamber of Commerce Philippines President Rex Daryanani expressed hope that term “5-6” would eventually be eradicated and be replaced by the term “microfinancing.” (DTI)