BSP rolls out system to spur MSME loans

Following the central bank’s rollout of a web-based credit scoring system in August, loans to micro, small and medium enterprises (MSMEs) could see improvement in the coming quarters as lending continued to fall below the mandated level in the second quarter amid limited credit information.

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The latest data from the Bangko Sentral ng Pilipinas (BSP) showed that total loans to MSMEs reached P540.9 billion as of end-June, 10.8-percent higher than the P488.1 billion recorded in the same period last year.

However, this amount only accounted for 4.6 percent of the banking industry’s P11.78-trillion lending portfolio, still well below the prescribed ratio of 10 percent.

Under the Magna Carta for MSMEs, which took effect in June 2008, banks are required to set aside eight percent of their lending portfolio for micro and small enterprises (MSEs), while two percent must be allocated to medium-sized enterprises.

However, most banks choose to pay penalties for missing the MSME lending quota rather than take on the risks of lending to small businesses.

Broken down, loans disbursed to MSEs stood at P220.6 billion during the period. This is equivalent to just 1.9 percent of their total loan book, falling short of the eight-percent lending requirement.

To meet this requirement, BSP figures indicate that lenders should have set aside a minimum of P942.6 billion for MSEs to borrow.