BSP, 33 lenders build SMEs’ risk database

The Bangko Sentral ng Pilipinas (BSP) expanded partnerships with 33 financial firms for its credit risk database (CRD) project which will enable lenders to serve more small and medium enterprises (SMEs).

BSP Governor Eli Remolona Jr. on Wednesday said the central bank initially eyed 20 financial firms that would share their client data for the CRD project.

“In four years, we created a large SME database and developed a credit scoring tool. This now helps financial institutions better assess credit risks, complementing their own methods,” BSP Deputy Governor Bernadette Romulo-Puyat said Wednesday during the launch of the second phase of the CRD project.

She added the central bank is now putting up the CRD tool into the web platform so the financial partners can use it more easily.

The CRD project is being done with the Japan International Cooperation Agency (JICA).

Risk-based program

“We still need to promote risk-based lending rather than relying on the conventional, collateral-based method,” JICA Chief Representative to the Philippines Sakamoto Takema said.

According to the BSP Financial System Report for the first half of the year, loans to SMEs and micro enterprises accounted for only 3.4 percent of the total loan portfolio of all banks and other financial firms in the country.

“This is far below the 10 percent mandated under the law,” Sakamoto said.

Microbusinesses and SMEs make up 99.6 percent of all businesses in the country and employ 63 percent of its labor force, according to the Department of Trade and Industry.