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Bank loans to MSMEs rise to nearly P200 billion

Written by on November 6, 2021

Bank loans to MSMEs rise to nearly P200 billion

Bank loans to MSMEs rise to nearly P200 billion

Lawrence Agcaoili – The Philippine Star

November 7, 2021 | 12:00am

MANILA, Philippines — Loans prolonged by banks to micro, small, and medium enterprises (MSMEs) used as compliance with the central financial institution’s reserve requirement ratio (RRR) practically hit P200 billion as of Sept. 23, in accordance with the Bangko Sentral ng Pilipinas.

BSP Governor Benjamin Diokno advised members of a digital discussion board organized by the Chinese language Filipino Enterprise Membership that the quantity disbursed to MSMEs reached P195.9 billion, representing 13.three p.c share of the whole required reserves as of the week ending Sept. 23.

This additionally represents a considerable improve from the P8.7 billion in MSME loans or 0.6 p.c of whole required reserves reported for the week ending April 2020 or because the BSP allowed loans to MSMEs as various compliance with the reserve requirement to incentivize lending.

“The BSP acknowledges the essential function of MSMEs within the financial system. Let me focus on the regulatory and aid measures that the BSP has carried out to assist them,” Diokno stated.

The regulator requires banks to maintain a minimal amount of money reserves with the BSP decided by the quantity of deposit liabilities owed to prospects.

The Financial Board slashed the RRR for common and industrial banks by 200 foundation factors in March final 12 months and for thrift in addition to rural and cooperative banks by 100 foundation factors efficient July 31 final 12 months as a part of measures to melt the influence of the pandemic on the financial system.

For one, the regulator has allowed the brand new peso-denominated loans to MSMEs and critically impacted giant enterprises that don’t belong to a conglomerate to be counted as compliance with the BSP’s reserve requirement.

Different prudential measures to help MSMEs accredited by the Financial Board embrace the briefly discount of the danger weights of loans granted to MSMEs

Within the regulatory capital therapy in addition to the deferment of the implementation of the revised risk-based capital framework for banks to finish 2022 from finish 2021.

Likewise, Diokno stated the interval of aid on the reporting of late and non-performing loans of debtors affected by the pandemic was additionally prolonged to finish this 12 months as a substitute of the unique timeline of March 8.

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