A new microloan program is set to launch this year, offering micro, small, and medium enterprises (MSMEs) access to much-needed capital. The program, a collaboration between UnionDigital Bank and the Social Security System, will allow eligible members to apply for loans ranging from P1,000 to P20,000. The application and loan disbursement process will be fully digitalized, available through a banking app, with funds also disbursable through a special card.
The micro-lending program, known as SSS LoanLite, was officially introduced last September and carries an 8% interest rate per annum, along with a service fee. Its repayment terms range from 15 to 90 days, providing members with a convenient and accessible way to access lending. The approval process will be handled by both the Social Security System and UnionDigital Bank, ensuring a streamlined experience for borrowers.
The launch of this program aims to address the persistent challenge of MSMEs in gaining access to capital, a major hurdle for many businesses. According to experts, access to capital remains one of the most significant challenges faced by MSMEs, particularly sundry shops, which often rely on high-interest rate lenders. The SSS LoanLite program is seen as a game changer, offering a more affordable and sustainable solution for these businesses.
Currently, MSME loans account for only a small percentage of the banking system's loan portfolio, falling short of the previously required 10% lending allocation. This has left many MSMEs without access to the capital they need to grow and thrive. The upcoming launch of the SSS LoanLite program is a step towards addressing this issue, providing MSMEs with a vital source of funding.
In addition to the SSS LoanLite program, UnionDigital Bank is also working on a new loan product in collaboration with Hapinoy, a nationwide grassroots community network of micro entrepreneurs. This product is expected to be rolled out later, further expanding access to capital for MSMEs. Recent initiatives, such as the Hapinoy Caravan, have already helped nearly 300 sundry store owners become more financially and digitally literate, paving the way for future collaborations and programs.
