The Small Business Corporation (SB Corporation), also called the Small Business Guarantee and Finance Corporation, was created under Republic Act No. 6977, as amended (also known as the “Magna Carta for Micro, Small and Medium Enterprises (MSMEs)“. The SB Corporation is charged with the primary responsibility of implementing comprehensive policies and programs to assist MSMEs in all areas, including but not limited to finance and information services, training and marketing.
The SB Corporation is administratively attached to the Department of Trade and Industry (DTI) and shall be under the policy and program supervision of the MSMED Council. It shall have its principal offices in Metro Manila and whenever necessary, establish branch office in the provinces.
BOARD OF DIRECTORS; COMPOSITION
The SB Corporation corporate powers shall be vested on a Board of Directors composed of eleven (11) members which shall include the following:
- a) The Secretary of Trade and Industry;
- b) The Secretary of Finance;
- c) A private sector representative to be appointed by the President upon the recommendation of the MSMED Council;
- d) Seven (7) representatives of the SB Corporation common stock shareholders who shall be elected based on proportional distribution, in accordance with Section 24 of the Corporation Code; and
- e) The president of the SB Corporation as ex-officio member and to serve as vice chairman of the Board.
The President shall appoint the chairman of the Board from among its members.
All members of the Board so appointed, except for the ex-officio members, shall serve for a term of three (3) years without reappointment. The person so appointed to replace a member who has resigned, died, or been removed for cause shall serve only for the unexpired portion of the term.
The Board of Directors shall have, among others, the following specific powers and authorities:
- a) Formulate policies necessary to carry out effectively the provisions of this charter and to prescribe, amend and repeal by-laws, rules and regulations for the effective operations of the small business corporation;
- b) Establish such branches, agencies and subsidiaries as may be deemed necessary and convenient;
- c) Compromise or release, in whole or in part, any claim or liability whatsoever for or against the SB Corporation, including interest, penalties, fees and/or other charges in accordance to its own by-laws and Bangko Sentral ng Pilipinas rules;
- d) Fix the features of non-voting preferred shares which shall be printed on the stock certificates evidencing the same;
- e) Exercise all such other powers as may be necessary or incidental to carry out the SB Corporation’s purposes; and
- f) Notwithstanding the provisions of Republic Act No. 6758 and Compensation Circular No. 10, Series of 1989 issued by the Department of Budget and Management, the Board shall have the authority to provide for the organizational structure and staffing pattern of SB Corporation and to extend to the employees and personnel thereof salaries, allowances and fringe benefits similar to those extended to and currently enjoyed by employees and personnel of other government financial institution.
FUNCTIONS OF SB CORPORATION
The SB Corporation, subject to compliance with the rules and regulations to be issued by the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission, shall have the following functions and duties:
- a) Source and adopt development initiatives for globally competitive MSMEs in finance and business technologies.
- b) To extend all forms of financial assistance to eligible MSMEs. The SB Corporation may also engage in wholesale lending.
- c) Guarantee loans obtained by qualified MSMEs.
- d) Hold, purchase, lease or otherwise acquire and own real and personal property, introduce necessary improvements thereon and to sell, mortgage, encumber or otherwise dispose of the same as may be necessary in the normal course of business.
- e) Formulate means and methods of accepting alternative collaterals and implementing alternative loan evaluation models.
- f) Apply for, receive and accept grants and donations from sources within and outside the country.
- g) Hold, own, purchase, acquire, sell, mortgage, dispose or otherwise invest or re-invest in stocks, bonds, treasury bills, debentures, securities and similar forms of indebtedness of the government, its agencies and instrumentalities or any government financial institution.
VENTURE CAPITAL AND MICRO FINANCE TRUST FUND
The SB Corporation may set aside an amount of money to encourage the setting up of a venture capital and micro finance trust fund for the purpose of promoting business opportunities available to MSME sector. The Venture Capital Fund shall be used mainly for venture capital finance especially in technology-oriented industries. The micro finance trust fund shall be used to provide collateral-free fixed and working capital loans to micro and small enterprises run by those emerging out of poverty.