MANILA, 19 November 2018 – Using personal experiences as an entrepreneur, his education in entrepreneurship at the Asian Institute of Management, and his five years as CEO of the CIC, PCEO Jaime P. Garchitorena  discussed  entrepreneurship and credit with start-up and other current entrepreneurs looking to grow and sustain their business in the recent DTI Financing Forum held at DTI Negosyo Center Manila in Lucky Chinatown, Binondo, Manila.

“Business is a risk that should be properly prepared for”, said PCEO Garchitorena, “ and the biggest risk is finding and maintaining a good source of funding”. He advised participants that the first step to entrepreneurship is the importance of establishing relationship with financial institutions, either through savings or building a credit history  

“People who jump into business without preparing a proper funding roadmap often get held back from the start by borrowing from funding sources, like informal lenders, that charge interest rates that few startup business can afford,” he said after the forum.

Bridging the Gap

“CIC enables a fact based conversation to happen between the lender and the borrower,” added by CIC’s PCEO. He said that CIC, as mandated by Republic Act No. 9510 also known as Credit Information System Act, keeps credit history of borrowers submitted by financial institutions. These credit records will be consolidated and will reflect in a credit report that can be used in applying for loan.  To the entrepreneurs’ benefit, a CIC credit report will help to show their creditworthiness to the bank where they want to apply loan with. The CIC being a trusted source of data, becomes a more valuable form of introduction to financial institutions when looking for credit.

These credit reports  can also be the basis of a credit score when processed by one of  CIC’s accredited credit bureaus. Credit score is the statistical probability of a borrower making good on his or her obligation, based on a number of characteristics. CIC has accredited four (4) credit bureaus, also known as Special Accessing Entities (SAEs) to do the credit scoring; CIBI Information Corporation; Compuscan Philippines, Inc.; CRIF Philippines; and TransUnion Information Solutions Philippines.

The President and CEO of CIC also shared pieces of advice  with the audience. He imparted that in starting a business, to gain experience, one should work first for the people who are already doing it. From there, aspiring entrepreneurs may obtain knowledge and experience that they may use to their advantage in starting their own businesses. This knowledge and experience can also be used in borrowing money since financial institutions must be convinced that a borrower has enough knowledge about the business and has a concrete business plan that will sustain growth of the business.

Data Plus Relationship Equals Credit

“In the end, lending is based on how a financial institution’s loan officer will assess you for your probability of repayment using existing relationships and data,” Garchitorena said. “If you already have a relationship with the lender then a CIC Credit Report could help the lender verify that your creditworthiness is beyond personal relationship. In the cases where you don’t have a personal relationship with the financial institution, the CIC Credit Report will be a trusted third party source which the lenders can use to verify exposures, payment behaviors, capacity, and propensity to pay.”

DTI Financing Forum is one of the project of Enterprise Development Division of DTI-NCRO in order to help MSMEs in expanding their businesses through sharing knowledge on financing and options or techniques to a prosperous venture in business.