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The central bank will create an information store that will help small and medium-sized companies with good prospects and reliable credit histories to obtain cheaper loans from participating banks, according to the country’s top financial regulator.
At a press conference, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said that the proposed credit risk database would generate statistical credit rating models that banks could use to assess the ability of SMEs to service their liabilities.
The goal is for each business to receive a credit rating based on various criteria to help banks price their loans according to the risk profile of borrowers. Borrowers with a history of paying loans on time will be able to borrow at lower rates, while those with troubled histories will have to pay a premium on their loans.
“The credit risk database is part of our strategic initiatives to improve SMEs’ access to finance and to support their post-pandemic recovery,” he said. “The BSP is committed to building a sustainable financing ecosystem for SMEs, which is a key driver of inclusive growth.”
According to the central bank, this credit risk database would promote access to finance for well-managed SMEs by providing banks with a robust credit assessment tool that enables risk-based lending and reduces dependence on collateral to make credit decisions.
The database is a joint initiative of BSP and the Japan International Cooperation Agency.
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