The Small Business Guarantee and Finance Corporation (SBGFC) and the Guarantee Fund for Small and Medium Enterprises (GFSME) were merged through Executive Order 28 and became known as the Small Business Corporation. Ms. Zorayda Amelia Alonzo became its Chairman and CEO and Mr. Benel P. Lagua as President and COO.

SBGFC was created on 24 January 1991 under Republic Act 6977, (as amended by Republic Act 8289). The Corporation was given a mantle of authority to offer a wide range of financial services, specifically for small and medium enterprises engaged in manufacturing, processing, agribusiness (except crop level production) and services (except trading). These financial services include among others guarantee, direct and indirect lending, financial leasing, secondary mortgage, venture capital operations and the issuance of debt instruments for compliance with the mandatory allocation provision.

Aside from the creation of SBGFC, the law likewise has the following significant provisions: a.) the creation of the Small and Medium Enterprise Development (SMED); b.) the mandatory allocation of credit resources to small enterprises; and c.) the rationalization of government assistance programs and agencies concerned with the development of SMEs. SBGFC commenced its operations on July 16, 1992. It is attached to the Department of Trade and Industry and is under the policy, program and administrative supervision of the Small and Medium Enterprise Development (SMED) Council.

At the time of the merger, GFSME was a guarantee fund operated independently by a Management Committee and professional staff under the Livelihood Corporation, a corporation attached to the Office of the President of the Philippines. GFSME’s services were restricted to offering of guarantee services to participating financial institutions lending to SMEs from the time it started commercial operations in 1984.

The merger of the two government financial institution was proposed by DTI Secretary Mar Roxas to create a more effective financial institution better geared to meet the needs of the SME market. With the merger, the National Government became the single biggest stockholder of Small Business Corporation.

As provided for under RA 6977, Small Business Corporation has an authorized capital stock of P5 billion with the initial capitalization of P1 billion in the form of equity investments in common and preferred stocks with each of the five government financial institutions contributing P 200 million.


Small Business Corporation played a key role in the drafting of the SME Development Plan approved by President Gloria Macapagal-Arroyo. The year was also marked by record breaking lending in the Corporation’s retail operation as it posted a total of P278 Million in loan approvals, which exceeded the highest approval level of P180 Million in 1999. Two new programs in retail lending were launched during this period: SME-Guarantee Incubator for DTI-endorsed Projects (SME-GUIDE), and SME-Financing Reach for Exporters through Network Development (SME-FRIEND).

Twelve months later Small Business Corporation hosted the 16th Asian Credit Supplementation Institution Confederation Conference, which is a gathering of credit guarantee institutions in the Asian region. Like the previous year, the Corporation grew its portfolio, this time with loan approval levels reaching the P2 Billion mark.


Successful negotiation of Official Development Loan (ODA) from the Asian Development Bank or ADB (US$25 million), KFW (US$14.04 million) and United Nations International Fund for Agricultural Development or IFAD (US$15 million).

The acquisition of the loan packages included the implementation of technical assistance projects on credit scoring, financial management, product development, business development services and accreditation system.


SB Corporation redesigned its major loan programs and posted a phenomenal 160% growth rate in its microfinance originations. It has adopted a more risk-based lending framework-credit guidelines, pricing, procedures and structures.

It was rated PRS Aa by the Philippine Rating Services Corporation in 2007. A PRS Aa rating means that SB Corporation has a strong capacity to meet its financial commitments relative to other Philippine Corporation.


President Gloria Macapagal Arroyo signed RA 9501 or the Magna Carta for MSMEs. The bill was considered as one of the priority legislative measures of PGMA’s administration. The Magna Carta for MSMEs has the following features:

1. Micro-enterprises are now included in the expanded definition of MSMEs;

2. The mandatory allocation of credit resources to MSMEs is increased from 8% to 10% and the period extended to another 10 years.

3. The Micro, Small, and Medium Enterprise Development (MSMED) Council is reorganized and strengthened;

4. Small Business Corporation is further strengthened as the government’s financing arm for SMEs; and

5. A congressional oversight committee ob MSME Development is created to monitor and oversee the implementation of the Magna Carta for MSMEs.


SB Corp launched the Risk -Based Lending Movement as a flagship program to obtain the commitment and support of various stakeholders of MSME development in adopting an assesment model that focuses on the enterprise itself rather than the enterprises’ capacity to put up or lack of collateral to secure a loan. As an alternative, SB Corp is propagating the use of the Borrower Risk Rating System that it developed with assistance from the Asian Development Bank is assessing risk associated with the prospective borrower. The movement was launched is a series of public events held in NCR, Cebu and Davao.


The Corporation continued to enjoy the confidence of partners and clients as 31 new financial institutions are added to its roster of partner institutions. In addition, about P1.2 billion was raised from banks who purchased MSME notes of the Corporation as an alternative compliance to RA 9501. This note of confidence was given clear and formal confirmation by a PRS Aa- credit rating granted to the Corporation by PhilRatings.

Lending performance has gone beyond the P4.0 billion mark in 2010 registering a 42% increase compared to its slight slump in 2009.

As part of its plan to reach out enterprises in more areas of the country, SBC opened a new area office for North Luzon in Baguio and has established three new desk offices in Palawan, Bacolod and Butuan.


The Philippines through SB Corp has successfully hosted the 23rd Asian Credit Supplementation Institutions Confederation Conference. Sixteen institutions from 11 countries , represented by more than 75 delegates were in attendance in the said conference.

SB Corp also announces the offering of P1.6 billion preferred shares as a means for banks to comply with the mandatory lending provision of the RA 9501.


Marks another milestone in SB Corp history. Celebrating its 20th year, SB Corp. reported a P3.8 billion lending performance.

As a major endeavor, SB Corp hosted the the 21st ACSIC Training Program in September. Thirty-seven participants from 14 ACSIC member institutions in11 countries participated in the program held at the Marriot Hotel in Manila.


Small Business Corporation is the National Government’s third largest provider of SME financing, with a lending portfolio of over P 3 Billion. There are over 10,000 clients, 150 partner financial institutions, and serving 65 of the 81 provinces across the country. The Corporation has 4 area offices, and 9 desk offices set across Luzon, Mindanao and the Visayas.


The year 2017 heralds a new and unpaved direction for Small Business Corporation as it took on a more serious developmental role as it shifts its strategic focus to better address the needs of the microenterprises burdened by high cost of financing. The year was a flurry of activities focused in the urgent implementation of the Administration’s Pondo sa Pagbabago at Pag-asenso (P3).

People and resources were mobilized to fast-track processing of loan transactions of borrowers under the P3. In 2017 SB Corp has approved a total of P 1.2 billion in credit line and released P784 M to 20,104 micro enterprises under P3.


The Pondo sa Pagbabago at Pag-Asenso or P3 program continued to be the banner program of Government for micro enterprises. In its 2nd year of implementation, the number of beneficiaries provided with financing assistance by year-end 2018 reached 61,204 distributed in 77 provinces all over the country. Total releases for the P3 program in 2018 is P1.8 billion.


In 2019, the Governance Commission for GOCCs (GCG) recognized SBCorp’s governance policies and practices as one of the best among GOCCs in the country. Such distinction was concretized when the Corporation garnered a rating for the GCG Corporate Governance Scorecard (CGS) enabling SBCorp to secure 7th place among 82 GOCCs. The CGS aims to annually assess the corporate governance performance of GOCCs and subsequently recognize well-governed GOCCs. With this achievement, SBCorp has manifested its strict adherence to sound corporate governance principles, best practices and international standards.

Government-supported Financing Program

SBCorp plays a central role in the country’s enterprise rehabilitation and economic recovery programs. In fact, SBCorp has been assigned by NG to implement government-supported financing programs for MSMEs.

Pondo sa Pagbabago at Pag-asenso Program

Further, beginning 2017, NG has instructed SBCorp to implement the Pondo sa Pagbabago at Pag-asenso (P3) Program. The P3 Program aims to provide enterprises with an alternative source of financing that is easy to access and at reasonable cost to boost the development of entrepreneurship in the MSME sector.

The program has been continuously funded via the Special Provisions of the 2017 to 2020 General Appropriations Act (GAA); amounting to ₱1.0 billion per year in 2017 and 2018 and ₱1.5 billion in 2019 and 2020. Each of these annual allocations provide for a mobilization fund component of five percent (5%). Given the explicitly defined nature of the P3 fund as a subsidy in the GAA, its primary purpose is to promote a social good and advance NG’s socioeconomic agenda of providing a viable financing alternative to micro enterprises (MEs).

Enterprise Rehabilitation Financing Program

In 2014 and 2015, NG released a total of ₱200.0 million to provide credit risk support to SBCorp’s ₱600.0 million corporate lending to MSMEs devastated by typhoon Yolanda through its Enterprise Rehabilitation Financing (ERF) Program.

SBCorp was able to lend close to ₱800.0 million to typhoon Yolanda-affected MSMEs through the ERF Program. The program portfolio is now down to ₱168.2 million, around 74% of which represents borrowers who failed to recover from the devastating business reversals due to typhoon Yolanda. This is nevertheless within SBCorp’s portfolio performance expectations given the inherent high risk in terms of enterprise rehabilitation financing. More importantly, potential losses is guaranteed to be within the ₱200.0 million credit risk support provided by NG – thereby avoiding any capital impairment against SBCorp.


The Bayanihan to Recover as One Act or Bayanihan 2 has directed SBCorp to expand its existing loan programs for MSMEs, cooperatives, hospitals, tourism, and OFWs affected by Covid-19 pandemic and by other socio-economic reversals

Loan proceeds are allowed to be utilized for: payroll cost; materials and suppliers; mortgage payments; rent; utilities, including fuel and storage; creation of new supportive businesses; re-purposing of existing business capital; any other business debt obligations that were incurred before the covered period; or acquisition of new technologies and systems to adjust business processes for resiliency.