Micro Small Medium Enterprises (MSMEs) continue to gain more access to financing and loans from banks during the pandemic. The Bangko Sentral ng Pilipinas (BSP) now uses borrowings to the sector as alternative compliance to reserve requirements. With these changes, banks have offered more loans to SMEs.
BSP data show that as of July 29, banks extended a total of PHP188.7 billion to MSMEs. This amount is a lot higher than the PHP8.7 billion as of end-April 2020.
This information was shared by BSP Governor Benjamin Diokno during a virtual briefing on Thursday. “These numbers suggest that banks continue to extend financial relief to borrowers during this crisis,” Mr Diokni said.
The BSP has allowed banks’ MSME borrowings as alternative compliance to reserve requirements since last year.
Banks will help economic activities robust during the pandemic
This aims to increase banks’ liquidity. This action is also to boost their ability to extend more loans to small businesses. The aim is to ensure that economic activities remain robust despite the pandemic.
“Thus, we encourage customers to approach banks regarding adjustments to their loan terms,” Diokni said. “The idea is to match their cash flows and paying capacity,” Diokno added. He also added borrowers may raise concerns about their financial transactions through the BSP’s Online Buddy (BOB). BOB is available at the BSP website.
BOB is an automated “chatbot” that will assist consumers in their complaints against banks and other financial institutions. It comes under the supervision of the BSP. BOB came online in July this year.
Diokno said restructured loans of banks rose to PHP328.6 billion as of end-June this year. The amount during the same period in 2020 was about PHP48.7 billion.
This increased the share of restructured loans on total loans to around 3.1 percent as of the first half this year from 0.5 percent a year ago, he added.