MORE banks have provided loans to micro, small and medium enterprises (MSMEs) in line with reserve requirements as the Bangko Sentral ng Pilipinas (BSP) continues to provide regulatory relief measures amid the persistent pandemic.
Jovelyn Hao, director of BSP’s technology risk and innovation oversight department, said loans from 89 banks to MSMEs reached 175.6 billion pesos as of April 22 this year, or about 12.4 billion % of total minimum reserves.
The latest number of banks and the amount used to meet the central bank’s reserve requirements were significantly higher compared to the 8.7 billion pesos in loans made by 47 banks to these companies as of April 30, 2020 following the l ‘entry into force of the relief measure, she said in a webinar.
âWe created a stimulus for the banking sector by allowing loans to MSMEs to be part of banks’ compliance with reserve requirements. And for this reason, banks have continued to provide new loans or refinance existing loans to MSMEs since March of last year, âshe added.
Hao said that the inclusion of new loans to MSMEs as part of banks’ compliance with reserve requirements is part of a package of relief measures instituted by the BSP to help financial institutions weather the economic crisis, and also support households and businesses affected by the pandemic.
She said PASB has also implemented a temporary reduction in credit risk weights for loans to MSMEs.
It also assigned a zero risk weight to MSME exposures covered by the Philippine Guarantee Corp., the Agricultural Guarantee Fund Pool and the Agriculture Credit Policy Council, she said.
âThese initiatives have helped free up bank capital requirements for loans to MSMEs and encourage banks to lend to marginal sectors like farmers and fishermen,â Hao added.
Additionally, Hao said the central bank has extended the relief period for reporting delinquent and non-performing loans from borrowers affected by the Covid-19 pandemic.
“All of these are aimed at helping banks to allow more loans to MSMEs to facilitate their business operations and, of course, their recovery,” she said.
To build capacity and empower MSMEs, Hao said PASB believes that innovative and sustainable financing approaches are essential to address the challenges of the country’s access to finance, especially given the negative effects of the pandemic. .
She said these approaches include developing a credit risk database, promoting supply chain finance in the banking sector to improve MSMEs’ access to finance, design and implementation. a survey on the demand for these enterprises and the implementation of financial education programs for MSMEs. (PHILEXPORT NEWS AND ARTICLES)