Pinoy Business Coach

By Conrado Banal III
Philippine Daily Inquirer

NOW THIS congressman wants the Bangko Sentral to do something about the unmistakable lack of information in banking for start-up mom-and-pop business. That, in effect, is the “underground” economy, which is said to generate the economic bustle enjoyed, ultimately, by big business.
Representative Ben Evardone (Eastern Samar) actually sends his plea to BSP Governor Armando Tetangco directly, whose six-year term is ending in just a few months. Would the good governor please, ah, “nudge” the banks to do a little information campaign for small-time borrowers? Or something like that!

Come to think of it, anyway, the banking industry does spend billions of advertising and PR pesos to blast an array of offers to…well, consumers. They push for mortgage, car loans and credit cards—to the point of badgering prospective clients with telephone calls, mails and personal assaults at the malls.

As the legislator noted, however, small-time borrowers are clueless about the types of banking loans for mom-and-pop businesses. They need a bit of honing on all sorts of bank transactions. In particular, interest rates remain a mystery to small borrowers, which in effect is the nitty-gritty of any bank loan. Plus, the banks include such things as administrative charges and “other” (i.e. unknown) costs.

Evardone claims that small businessmen want to join the banking mainstream, but first-time borrowers often do not get the best possible terms. For instance, what loan is best for a start-up agribusiness venture or a returning OFW putting up a machine shop, which fits the business and capacity to pay?

“Popularizing” such information nevertheless does not really require legislation, at least not to Evardone. Whew! But the Bangko Sentral can use a little moral suasion on banks to throw some PR and advertising crumbs to an information campaign for small-time borrowers. By definition, being mom-and-pop businesses, they hardly have the sophistication to get information from the banks, much less borrow from them. I mean, really, the situation only makes things easy for those foreign-looking loan sharks on motorcycles. Five six, ba!

*Raising capital becomes a required skill in the Philippines