BSP eyes credit risk database for MSMEs

MANILA – Micro, small and medium enterprises’ (MSMEs) access to financing are expected to further widen through a statistical reference tool being developed jointly by the Bangko Sentral ng Pilipinas (BSP) and the Japanese government.

“This (database) will lessen the dependence of banks on collateral, hence, increase MSME access to financing,” BSP Governor Benjamin Diokno said .in a speech, a copy of which was released to journalists Monday.

Diokno earlier said they were in the process of creating a comprehensive statistical reference tool for risk-based lending.

The government has been increasing its support to the MSME sector especially since the pandemic hit.

This, as the sector accounts for over 60 percent of domestic employment and has over 90 percent share among enterprises in the country.

For the BSP alone, it has allowed, for a limited period, the reduction in credit weight of loans extended to MSMEs that are currently in status and has assigned a lower risk weight for MSME exposure that are covered by guarantees.

These moves aim to provide banks additional liquidity for them to extend more loans to their clients, especially small businesses.

The BSP has also deferred by a year the implementation of the revised risk-based capital framework for stand-alone thrift banks (TBs) and rural and cooperative banks (RCBs) from the original implementation date of January 1, 2022.

It has also lengthened the period by which banks need to report past due and non-performing loans (NPL) of borrowers affected by the pandemic from the original date of March 8, 2021 to end December next year.

Diokno said these responses are aimed at lifting both the small businesses and the domestic economy.

After the domestic economy entered a recession in the second quarter of the year, Diokno said signs of recovery continue to show.

“At this point, I can report that the worst is over,” he added.

Diokno, however, said that “while we’re not out of the woods yet, there has been progress as the economy gradually opens up from the strict lockdown in March to June to less stringent quarantine measures.”

“We’re learning to live with the virus. Now, we’re at an inflection point,” he said. (PNA)

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