MANILA - Credit Information Corp. (CIC) president Jaime Garchitorena said six credit bureaus have been accredited to set up shop in the Philippines, the first batch since CIC was established in 2008.
These credit bureaus, also known as "Special Accessing Entities" provide credit reports, ratings and other similar credit information products and services.
Garchitorena said these credit bureaus should make it easier for micro, small and medium enterprises (MSMEs) to get financing from banks.
"Invisibility is used by SMEs, because they were funded by family, friends. Invisibility means less regulation, taxes. But there should be a change in mindset, (they should try) to take advantage themselves, there's a need to engage financial systems through formal systems," he said.
Of the six firms, five are foreign companies: Compuscan (of South Africa), Crif (Italy), Dun and Bradstreet (of the US), TransUnion Philippines (which already has presence in Manila), and Credit Bureau Singapore. Local company CIBI information also got the go-signal.
"All foreign credit bureaus have presence in economies where there are large OFW [overseas Filipino worker] markets," said Garchitorena.
This means if an OFW in Italy wants to take out a loan there, tapping a credit bureau which has presence in both Philippines and Italy, makes the transaction easier, because it will be able to more easily translate credit ratings, scores from Philippine to Italian context.
These credit bureaus can begin operations once fully incorporated with the Securities and Exchange Commission, but as to extent of having data available, or the use of data collection system by CIC, that's expected to happen around December 2016 or early 2017. CIC will be holding a roadshow in June.
Meanwhile, senior adviser of Nomura and coordinator of the Asia-Pacific Finance Forum Dr. Julius Caesar Parrenas cites China as one of the best examples of how SMEs got better access to funding through: (a) People's Bank of China's establishment of a credit information system, and (b) expansion of electronic commerce platform through which SMEs were able to access data, finance they needed to get loans from banks.
SEC chairwoman Teresita Herbosa hopes reforms in finance infrastructure will help SMEs, the bloodline of the economy, thrive and grow.
"Eighty percent to 85 percent of businesses are SMEs, the rest-- 15 percent to 20 percent are big, public companies. But these 15 percent to 20 percent hold the money," said Herbosa.