BSP launches Credit Risk Database for SMEs

The Bangko Sentral ng Pilipinas (BSP) on Thursday launched the Credit Risk Database (CRD) aiming to provide a statistical credit scoring of small and medium enterprises (SMEs) which can predict the probability of default in the long run.

A joint program with the Japan International Cooperation Agency (JICA), the CRD aims to improve access to finance among SMEs by promoting risk-based lending and lessening the dependence of banks on collaterals during credit evaluation.

"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 during the launch.

The virtual launch was participated by representatives from JICA, the Chamber of Thrift Banks, the Bankers Association of the Philippines, and the Rural Bankers Association of the Philippines, as well as representatives from the 17 pioneer participating banks.

Participating banks are the Land Bank of the Philippines (including the Overseas Filipino Bank), the Development Bank of the Philippines, Security Bank Corp., Rizal Commercial Banking Corp., Philippine Business Bank, Sterling Bank of Asia, China Bank Savings, Malayan Bank, Philippine Savings Bank, UCPB Savings Bank, Producers Savings Bank, Queen City Development Bank, Wealthbank, Sun Savings Bank, AllBank CARD SME Bank, and First Consolidated Bank.

"As we usher in the new economy and steer towards a strong post-pandemic economic recovery, we expect the CRD to contribute to providing stimulus for inclusive economic development," said Diokno.

"As the CRD will augment the access of SMEs to credit, it will lead to their enhanced productivity and competitiveness and also generate much-needed jobs and source of income for many Filipinos. Indeed, the project will provide long-term support to SMEs," he added.

Latest data from the Department of Trade and Industry (DTI) show that MSMEs account for 99.52% of the total 1.003 million business establishments in the country in 2018.

Micro enterprises are defined as those with total assets worth less than P50,000; cottage enterprises with assets worth P50,001 to P500,000; small with P500,001 to P5 million; and medium from over P5 million to P20 million.

In May, Trade Secretary Ramon Lopez said over 525,000 or 52.66% of MSMEs in the country had to stop operations due to the lockdowns imposed to curb the spread of the COVID-19.—AOL, GMA News