MSME access to bank lending ‘remains a challenge’ despite BSP’s regulatory relief

ACCESS of micro, small and medium enterprises (MSMEs) to bank lending remains a hurdle, especially amid the challenging business environment induced by the coronavirus pandemic.

Filipino-Cebuano Business Club chairman Rey Calooy said some MSMEs still have a difficult time availing of loans from banks.

This despite a package of regulatory relief and incentive measures introduced by the Bangko Sentral ng Pilipinas (BSP) to sustain bank lending to MSMEs.

With the aim to stimulate lending, the grant, renewal or restructuring of loans to MSMEs form part of the alternative compliance with the reserve requirements beginning April 24, 2020 until Dec. 29, 2022.

“It’s not easy to avail of loans, especially if their business is under categories which were severely affected,” he said.

Calooy said these categories include tourism, education, transportation, selected dine-in restaurants and some manufacturing on non-essentials that were badly hit amid the Covid-19 pandemic.

“Banks are very cautious nowadays,” he said.

In a press release, the BSP said that to support financial consumers and help buoy the economy from the impact of the pandemic, the central bank has issued a cumulative policy rate cut of 175 basis points since February 2020 to bring borrowing costs to record lows and boost lending. These rates are the lowest on record since the BSP shifted to an interest rate corridor in 2016.

The credit risk weight of MSME loans that are current in status was also reduced to 50 from 75 percent until

end-December 2021.

Meanwhile, loans that are guaranteed by the Philippine Guarantee Corp., the Agricultural Guarantee Fund Pool and the Agricultural Credit Policy Council were assigned a zero percent credit risk weight.

This move is meant to encourage banks to lend to small farmers and fisherfolk. ​

As a result of these measures, the top 30 banks granted loans amounting to P40.6 billion during the initial enhanced community quarantine months of March and April 2020.

In addition, P25.6 billion in MSME loans was renewed while P1.8 billion was restructured by the top 30 banks during the same period.

Meanwhile, as of the reserve week ending Oct. 29, 2020, an average of P126.4 billion in MSME loans was used as compliance with the BSP’s reserve requirements, a substantial increase from the P8.7 billion in MSME loans reported in April 2020. / JOB


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