Expansion of credit information system to boost credit for MSMEs

QUEZON CITY, 27 November 2015 – The Asia-Pacific Economic Cooperation (APEC) Summit 2015 has undertaken steps to bridge the wide gap between major creditors and small entrepreneurs among its member economies through the expansion of the credit information system.

The 2015 APEC Economic Leaders affirmed the launching of Financial Infrastructure Development Network (FIDN) which was part of the APEC 2015 Cebu Action Plan (CAP) developed by members economies’ finance ministers earlier this year.

Through the expanded credit information system, banks will have access to information credit-worthy micro small and medium enterprises in APEC member economies, Department of Finance assistant secretary Ma. Teresa Habitan said Friday during the Kapihan sa Media ng Bayan.

“Ngayon kasi ang kilala lang ay yung malalaking kumpanya,” Habitan said. “So kailangang makilala rin ang MSMEs. So ang punto natin diyan, we need to make that information available.”

The Credit Information System (CIS) is a database of credit information collected from various sources such as banks, financial institutions, insurance companies, financing companies, credit cooperatives, as well as utility companies and other businesses that extend loans.

At present, credit information is limited to certain bank and financial institutions, Habitan said.

In an earlier statement, Department of Finance Undersecretary Gil Beltran noted that even though MSMEs comprise 97 percent of enterprises in the APEC, and employ 50 percent to 80 percent of the workforce, only 15 percent of MSMEs in the region have access to formal financing institutions.

The need to provide MSMEs access to credit was affirmed during the 2015 APEC Economic Leaders Meeting last November. The economic leaders said this would allow MSME expansion, internationalization, and productivity improvement.

“We welcome the commitment made by the private sector and international finance organizations to collaborate with the public sector through the recently launched Financial Infrastructure Development Network under the CAP,” the economic leaders said in their statement in November 2015.

They also recognized MSMEs’ resilience against disasters, financial crises, and other unexpected events. “In addressing these challenges, we recognize the important role of public finance such as credit guarantee systems designed for MSME operational continuity and the importance of enhancing closer collaboration with relevant public and private sector institutions.”

Habitan said this is the best time to extend loans and credits to MSMEs due to positive development in the Philippines economy such as the six (6) percent GDP growth in the third quarter of 2015. (Ryan Calubad/Rey Abella-Media ng Bayan)

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