Loans to MSMEs still below threshold

Loans disbursed by banks operating in the country to micro, small, and medium enterprises (MSMEs) grew by 5.8 percent to P488.13 billion in the first half of the year from P461.39 billion in the same period last year, data from the Bangko Sentral ng Pilipinas (BSP) showed.

- KEISHA TA-ASAN

However, the banking sector's overall compliance ratio stood at 4.52 percent as of end-June, still below the required 10 percent under Republic Act 6977, as amended by RA 8289 and RA 9501 otherwise known as the Magna Carta for SMEs.

The law mandates banks to earmark eight percent of their total loan portfolio for micro and small enterprises, and two percent for medium enterprises.

As of end-June, the industry's total loan book, net of exclusions, jumped by 10.2 percent to P10.8 trillion from P9.8 trillion a year ago. This means allocations for the MSME sector should have reached P1.08 trillion.