THE Bangko Sentral ng Pilipinas (BSP) has vowed to push for the legislation of measures and implementation of programs that will improve the access to credit of micro, small and medium enterprises (MSMEs).
In a forum with exporters last week, BSP Governor Benjamin E. Diokno said the review and the eventual amendment of the Agri-Agra Reform Credit Act will boost the operations of MSMEs. The BSP is batting for the amendment of the law to expand the projects that banks can fund to comply with their agricultural financing obligations.
Under the law, banking institutions, whether state or private, are required to set aside at least 25 percent of their total loanable funds for agriculture and fisheries credit in general, of which 10 percent should be allocated for agrarian reform beneficiaries.
Further, Diokno said thepassage of the Personal Property Security Act will enhance the access of MSMEs to business and consumer credit by enabling the use of alternative collateral, such as equipment, inventory and warehouse receipts. Signed into law last year, the implementing rules and regulations of Republic Act 11507 have not yet been completed.
“The introduction of updated and more flexible provisions in these laws would help MSMEs, especially those that are agricultural-oriented, to gain access to credit; leverage innovative models; and induce banks to venture into MSME and agriculture financing with better terms and standards for compliance,” Diokno said at the forum.
He added the BSP, along with the Cooperative Development Authority, is implementing the Credit Surety Fund program. The CSF seeks to boost the credit worthiness of MSMEs by providing surety cover of up to 80 percent for their bank borrowings.
Image credits: dbm.gov.ph