Banks lend P117B to small, medium firms

Banks have managed to extend more small enterprise loans than they were required during the first three months of the year, with total loan releases amounting to P133.041 billion during the review period.

Under the law, banks are required to set aside at least six percent of their net loan portfolio for small enterprises. For the first three months of the year, the actual amount extended by the banking system, according to the BSP, represented a total of 12.68 percent of the net loan portfolio as banks outperformed the minimum requirement set by the BSP by P70.093 billion.

But the latest loan figures were lower than the P155.783 billion recorded in the first three months of the year.

Data from the BSP showed that a total of P116.758 billion worth of direct loans were extended to small enterprises but banks still channeled about P7.946 billion P16.397 billion worth of funds to alternative forms of compliance.

The BSP said universal banks set aside a total of P66.290 billion in direct loans for small enterprise loans and about P3.421 billion worth of indirect compliance with the law.

Commercial banks, on the other hand, handed out P9.14 billion worth of direct loans, thrift banks gave out P27.128 billion and rural/cooperative banks lent P14.198 billion.

Broken down, the BSP reported that thrift banks and rural cooperative banks outperformed universal and commercial banks since they were better oriented to retail lending than the larger banks.

The BSP also reported that the banking industry had unavailed committed credit lines of P5.158 billion. This amount was set aside by banks but were not actually availed of by small borrowers.

The alternative modes of compliance includes equity investments in the Small Business Guarantee Fund Corp. (SBGFC), a state-owned corporation primarily involved in providing guarantees for small business loans.

According to the BSP, thrift banks and cooperative rural banks had the highest compliance rate, followed by government-owned universal banks and then by domestic unibanks and foreign commercial banks.

On the other hand, the BSP also reported that banks extended loans to medium enterprises amounting to a total of P114.061 billion, equivalent to 10.87 percent of net loan portfolio for the period which amounted to P1.049 trillion.