January 3, 2012
ANGARA LAUDS BSP'S CONTINUING MICROFINANCE PROGRAM
Senator Edgardo J. Angara commended the extension of the regulatory exemption allowing micro, small and medium scale enterprises (SMEs) to apply for loans without submitting audited financial statements.
The Bangko Sentral ng Pilipinas (BSP) announced last week that they had extended the exemption--which would have expired in the last day of 2011--until December 31, 2014.
"These MSME's provide so many Filipinos with jobs and stable income, so we should focus on providing them the funding they need to keep operating," said Angara.
"However most of these small businesses lack the proper paperwork which prevents them from borrowing the capital they need, so this extension is much needed," he added.
Close to a million SME's had successfully borrowed from the BSP in 2011 with an average loan of P7,260 per proprietor.
Angara, vice-chair of the Senate Committee on Finance, has been a long-time advocate of microfinancing programs, which is especially beneficial for Filipinos living in rural areas.
According to Angara, the country's financial institutions should also strive to improve their credit information system so that loans are processed more efficiently.
"With this, we can expect to improve the availability of credit especially to small borrower entrepreneurs," he explained.
Angara authored the Credit Information System Act (CISA), which was signed into Law in 2008 as Republic Act No. 9510. The Credit Information Corporation created by this legislation establishes a comprehensive and centralized credit information scheme that will shorten processing time and reduce transaction costs.
"A reliable credit system will effectively address the need of financing institutions to check the track record of their borrowers, resulting in less credit risks and more stability," Angara explained.