Finance experts from the governments and the private sectors of countries under the Asia-Pacific Economic Cooperation (Apec) are discussing financial-inclusion issues in the region, particularly on extending credit to the poor, whom banks are averse to extending loans because of their lack of acceptable collateral.
In the 2015 Asia-Pacific Forum on Financial Inclusion scheduled on Monday and Tuesday in Tagaytay City, the discussions focused on how to come up with a credit-information system that will provide data on the credit-worthiness of everyone, especially the poor in emerging economies like the Philippines, so that banks have an idea of the extent of credit they can provide for loan applicants.
Finance Undersecretary Gil Beltran said in his opening remarks that a credit-information system, especially one that will provide data on the credit-worthiness of small and medium-sized enterprises (SMEs), is vital in achieving the goal of financial inclusion.
The Philippines has yet to operationalize a credit-information database, although the law establishing the government-owned Credit Information Corp. was enacted six years ago. “To solve the assymetric information problem in financial inclusion, credit-information systems will be examined with particulars on private credit bureau and a public credit registry and how they can complement each other. We are also discussing into making public and nonbank data more accessible to private bureaus because they are more efficient when they have access to such data,” Beltran said.
Beltran said that of particular importance to the Philippines, among the topics for discussion is the plan on how to extend credit to SMEs, considered the backbone of the economies of developing countries in the Apec.
“We are also pushing on how to assist SMEs more access to credit by developing and creating more credit-reporting products for them. As we all know, SMEs are the backbones of most of our economies; SMEs create jobs and, therefore, we must support SMEs in any way possible,” Beltran said.
“To complement financial-inclusion work on SMEs, we are doing a session that will enable SME access to finance through improved secured transactions systems by looking at reforms of the legal and regulatory regime. Here we are talking about commercial law reforms, among others, which will benefit SMEs,” he added.
David Cagahastian