SMEs reiterate call on banks to soften credit requirements

CEBU, Philippines - While most banks are reporting good financial performances, and healthy outlook for the rest of the year, small and medium business players are reiterating their call to urge the banking sector to further open its doors to credit.

“Banks are still maintaining intimidating factors. Clearly, there is a huge ‘disconnect’ between the financial institutions, and the business sector,” said Aldeguer adding that this problem should be taken in consideration in the banking sector, specifically that the Philippines need to pump prime its economy to sustain growth, amid the fragile economic global condition.

Aldeguer said there is a need for banks to re-examine and understand the changing needs of today’s young, and vibrant entrepreneurs.

At present, he said the bank’s products are entrepreneur-friendly and most do not cater to the needs of the ones desperately needing it.

The younger entrepreneurs are very dynamic, they have different capitalization requirements, coming from diverse family background. Thus, banks’ should also be as dynamic as the new generation of Filipino entrepreneurs now.

Likewise, Mandaue Chamber of Commerce and Industry (MCCI) board of trustee Glenn Anthony O. Soco, said that despite the swelling liquidity in the financial system today, the MSMEs sector is still having difficulties to access funds for expansion, because of discriminating requirements which discourage small and medium entrepreneurs to expand their businesses.

“I hope that the government is true to its words that credit is widely available. Yes, we have excess liquidity, but the small and medium players should also be given opportunity to access the funds through credit,” Soco said.

According to Soco, the Philippines’ economy is supported by the over 90 percent Micro-Small-Medium Entrepreneurs   (MSMEs), but the problem now is, only those big companies which can easily access the excess funds from banks, and even from the GFIs (Government Financial Institutions), because only those large companies can produce the documents required by these financial institutions.

Access to financing, has been a long over-due call from the MSMEs. Soco said now that the Philippines is facing a very fragile economic environment, which can be easily contaminated by the crises faced by economic giants, it has to boost its own private sector.

Economist Jonas Ravelas of the Banco de Oro Universal Bank, he said private sector should take advantage of the country’s excess liquidity in the banking system, as there less loan takers due to uncertainty of the economy.

Ravelas said the business sector does not have confidence yet to borrow, as the world economy in general is still unstable.

Ravelas urged the traders to make good relationship with the banks in order to avail of credit for expansion of their respective businesses, saying it is now the time to take advantage of credit facilities in the banks because of low interest rates.

He however warned that the banking institutions are strictly upholding its “credi scoring” practice to avoid high delinquencies in the future.— Ehda M. Dagooc

On the other hand, banker Alberto S. Villarosa, president and chief executive officer (CEO) of the Security Bank and president of the Bankers Association of the Philippines said that the banking sector is tied up with the rules and regulations provided for by the Bangko Sentral Ng Pilipinas (BSP) on providing loans to customers.

“Our hands are tied,” Villarosa said adding that the BSP has different set of rules that banks need to implement specifically for the micro-finance sector.

At present, the banking sector suffers from lack of “eligible” borrowers, while the Philippine business is composed of over 90 percent SMEs, including the micro-entrepreneurs. (THE FREEMAN)