MANILA, 10 July 2017 – Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr. aims to focus on diminishing barriers to lending instead of enforcement of mandatory 10% loan requirement.
On his keynote address at the 1st General Membership Meeting and Induction of Officers of the Credit Management Association of the Philippines (CMAP), BSP Governor Espenilla that he prefers voluntary lending basis from banks.
“I think the way to solve that is, rather than focus on mandated lending, we must deal with the issues that make it easier for creditors to lend on a voluntary basis by first improving the credit information law. There are other issues in play such as the difficulty of enforcing contracts,” Mr. Espenilla added.
In line with this, he said that there's a continuously fall down on the mandated lending for microfinance and small and medium enterprises (MSMEs) from banks under the Republic Act No. 6977 as amended by RA 8289 and 9501 or the Magna Carta for SMEs.
The Creditworthiness of a Borrower
In a statement, he said also that "So if you don’t know those customers, you are not geared to serve them. You are [now] faced with a difficult choice of not complying, then you pay the penalty."
According to the BSP Governor, banks can have better risk management on lending MSME sector once the CIC's Credit Information System (CIS) has rolled out – providing an accurate assessment on the credit behavior of a potential borrower.
Sources: PhilStar & Manila Standard