BSP, IFC ease small loans with novel collateral

The Bangko Sentral ng Pilipinas (BSP) and the International Finance Corp (IFC) aim to increase the number of loans backed by movable assets in the country to more than 5 percent of its total portfolio.

The BSP on Wednesday said the IFC, the financing arm of the World Bank Group, will help it create new regulations, educate stakeholders and offer other technical services about movable asset finance for micro, small and medium enterprises (MSMEs), including those in the agriculture sector.

Movable asset finance involves non-real estate assets like inventories, receivables, and equipment, that the MSME borrowers can present as collateral for bank loans or financing options.

“With this, MSMEs can use their available assets to access financing for their working capital and other needs,” BSP Governor Eli Remolona Jr. said.

Movable assets’ list

According to the World Bank, several countries have established movable assets registries, which have increased small businesses’ access to loans by 7 percentage points and their access to other finance options by nearly 8 percentage points.

“The impact of the introduction of registries for movable assets on firms’ access to bank finance is larger among smaller firms, which also report a reduction in a subjective, perception-based measure of finance obstacles,” the global institution said.

The BSP and the IFC plan to create an efficient ecosystem for movable asset finance by 2027.

Both institutions committed to this project through the signing of its memorandum of understanding on 17 March 2025.

The BSP reported loans to MSMEs increased to P488.1 billion in June last year from P461.4 billion in the same month of 2023.