Foreign investors and international companies have been employing Philippine’s labor resources for quite some time. These foreign entities have been flourishing and making huge profits by using Philippine manpower; while paying them very low wages.
Thus, in order to avoid brain-drain and employ these labors within the country, the government of Philippine has encouraged the creation and development of SMEs by passing Republic Act (RA) 6977 - the Magna Carta for Small Enterprises.

Enacted by the Philippine Congress in 1991, Magna Carta is a landmark legislation that mandates the government to support, strengthen and promote the development of SMEs by:

• Providing a conducive business environment for them

• Providing easier access to finance

• Creating linkages between SMEs and larger organizations

• Reinforcing partnership between government and the private sector

• Providing entrepreneurship training and skills learning platforms

The most important mandate provided by this law was that it directed all lending institutions in the Philippines to set aside a certain portion (approximately 10%) of their credit portfolios for SMEs. Magna Carta also laid out certain parameters and measures to achieve its objectives. Some of these are:

• Segmentation of enterprises according to their asset size and introduction of structural support to enhance the growth of these enterprises

• Creation of Small and Medium Enterprise Development (BSMED) Council to carry out the objectives of the law

• Stipulation of various monetary and non-monetary incentives for SMEs

• Streamlining of business requirements and procedures and introduction of a minimal set of rules and procedures of SMEs

• Creation of Small Business Guarantee and Finance Corporation (SBGFC) to develop business networks and production operations

Just like Government of the Philippines, the mission of CreditBPO is to become a strategic partner of SMEs toward business growth. Our innovative approach to assist business owners is to gain an understanding of the creditworthiness and financial position of their businesses. Our CreditBPO Rating Report ® provides actionable insights specific to an SME’s business and helps business owners improve their credit rating. We not only provide SMEs an analysis of their business, but also offer business owners an actual roadmap to improve creditworthiness and growth.

For further knowledge and queries, please visit creditbpo.com or email us at support@creditbpo.com.