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BSP, Japan to create SME credit database


The Bangko Sentral ng Pilipinas (BSP) is working with the Japanese government to develop a database that will measure the creditworthiness of small and medium enterprises (SMEs) in the country.

“[W]e are working with the government of Japan to establish a credit risk database (CRD),” BSP Governor Benjamin Diokno said in a recent event.

Diokno said the database “will produce scoring models predicting the creditworthiness of SMEs to help improve their access to finance through risk-based lending and lessen the dependence of banks on collateral.”

He said the database is just one of the central bank’s initiatives “to build the foundation for a robust financial infrastructure” for SMEs and micro enterprises.

Diokno said the BSP recognizes the immense potential and unique challenges of micro, small and medium enterprises (MSMEs), which account for 99.6 percent or 911,768 of the country’s enterprises and generate 61.6 percent of employment.

However, he said capital investment remains low, with MSME loans in the banking system accounting for 6.2 percent and 9.2-percent share in total business loans.

Besides the CRD, the BSP chief said the regulator also supports laws relevant to financial inclusion, such as the Philippine Identification System Act, Personal Property Security Act and the proposed Warehouse Receipts Law, as well as the review and amendment of the Agri-Agra Reform Credit Act of 2009.

“The introduction of updated and more flexible provisions in these laws would help MSMEs, especially those that are agriculture-related, to gain access to credit; leverage innovative models; and induce banks to venture into MSME and agriculture financing with better terms and standards for compliance,” he said.

Diokno also highlighted the central bank’s Credit Surety Fund (CSF) program, which enables cooperatives, businessmen and MSMEs to boost their credit-worthiness by providing surety cover of up to 80 percent for bank loans.

As of September 2018, there are 54 CSFs throughout the country with over 17,000 loan beneficiaries, he reported.

“I am optimistic that the various financial inclusion initiatives of the BSP will help improve access of MSME exporters to financial services, and consequently enhance our country’s export competitiveness,” Diokno said.

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