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To boost its lending facilities, the Social Security System (SSS) reduced its interest rates on its social and business loans. Romulo Neri, SSS president and Chief Executive officer, said that the adjustment took effect last July 1, following the downward trend in banks’ lending rates.

On loans with a term of one year or less, SSS slashed the interest rates from six percent to 5.5 percent, while those with a term of more than one year to three years, it’s now 6.25 percent from a previous seven percent rate. Loans with a term of three years to five years have also been reduced from 8 percent to 7 percent, for loans with more than five years term, it’s 8.5 percent from a previous 9 percent.

Neri Said “We lowered our interest rates to generate more employment by helping enterprises expand their operations and members set up their own businesses. This also benefits companies affected by the global financial crisis.”

The pension fund has a Special Financial Program for small and medium enterprises which offers loans of up to P50 million, while large-scale companies can borrow P51 million to P500 million under the SSS’ Industry Loan Program. SSS likewise offers special loans to tourism projects, hospitals and educational institutions, including vocational and technical schools.

The interest rates are fixed for loans with a term of five years or less, while interest rates of those with longer terms will be reviewed after five years, according to the SSS official. To avail of the loan packages, interested borrowers may inquire through the pension fund’s accredited banks, which charge a spread of not more than four percent.

A total of P305 million in social development and business loans have already been released by the agency this year, which brings to P22 billion the total amount of social development and business loans granted by SSS for the last twenty years to small and medium enterprises.