The FINANCIAL -- IFC, a member of the World Bank Group, is supporting Philippine small businesses by helping establish a comprehensive credit information system and modern secured transactions system in the country.
“The systems will together improve MSME access to affordable finance and create a more competitive and sustainable economy,” said Yuan (Jane) Xu, IFC Philippines Country Manager. “IFC is committed to work with its partners to deepen financial inclusion in the country.”
The improved credit information ecosystem will provide sufficient credit information that will encourage banks to lend to small borrowers with good credit histories. IFC is also promoting policy reforms on secured transactions, which allows banks to accept movable assets like accounts receivables, inventory, equipment, and intellectual property, as collateral, according to IFC.
An estimated 99 percent of all registered businesses in the Philippines are micro, small, and medium enterprises (MSMEs), Togather, they employ 70 percent of the country’s workers and produce one-third of its gross domestic product. A vibrant MSME sector creates jobs that lift people out of poverty and spurs inclusive growth.
Two events held in Asia-Pacific in November highlighted the importance of MSMEs in the regional economy. The APEC Summit approved action plans to support MSMEs and improve their access to finance while the ASEAN Summit formalized the ASEAN Economic Community as a single market and production base. This will provide more opportunities for MSMEs to participate in global value chains. In the circumstances, IFC’s interventions is timely.
Also, on the small business front, IFC is assisting the Rizal Commercial Banking Corporation’s SME Lending Program to design a package of non-financial services for its SME clients. IFC was the anchor investor in RCBC’s $320 million bond issue to support the bank’s efforts to increase financial inclusion by providing SMEs access to financial services.