MANILA – Small and medium enterprises (SMEs) will now have a better access to loans through a system that collects their data and generates their credit scoring, the central bank said on Thursday.
The Bangko Sentral ng Pilipinas (BSP) and the Japan International Cooperation Agency (JICA) launched the Credit Risk Database (CRD) project that seeks to generate and analyze credit scoring data of SMEs for easier borrowing.
"The CRD project is a tangible step in building a sustainable financing ecosystem for SMEs, the backbone of our economy and the driver of the country’s inclusive economic growth,” BSP Governor Benjamin Diokno said.
"It aims to improve access among SMEs by promoting risk-based lending, which uses credit scoring models to assess the capacity of SMEs to pay their loan," he added.
A concept originating in Japan, a CRD Data Center will collect data of SMEs from lenders, which are CRD members.
The processed data will generate a credit scoring for the SMEs to better guide banks and financial institutions in lending funds to these businesses.
The BSP said encoding of SMEs data into the system will start by the end of the year.
It expects to build the scoring model by mid-2021, and deliver the credit scores results by 2022.
The CRD system will solve the SMEs' difficulty in getting funding for their business, and will address the banks' concern of high cost and high risk lending to small-time enterprises, said the BSP.
The project is part of the government's thrust to support SMEs and aid them to withstand the negative effects of the pandemic.
Around 99.5 percent of the businesses in the Philippines are SMEs, employing 62 percent of total workers and adding 36 percent to total sales.