MANILA, Philippines—The Bangko Sentral ng Pilipinas has urged banks to lend more to micro, small, and medium-sized enterprises, saying that meeting their credit needs would ease the impact of the global economic downturn.

BSP Deputy Governor Diwa Guinigundo said that as much as 60 percent of the financing needs of MSMEs were unmet.

Guinigundo said that although there had been efforts to boost lending to the sector, more needed to be done.

“We [BSP] would like to look at it as a challenge to the banks because estimates indicate that 60 percent of MSMEs’ credit needs are still not served,” Guinigundo said in a speech before MSME operators in Negros Oriental during the launching last month of a surety fund for entrepreneurs in the province.

Surety fund is the guarantee used by MSMEs, especially those who do not have assets to put up as collateral, when applying for a bank loan.

MSMEs are estimated to account for 90 percent of local firms.

Guinigundo said the time was not right for banks to be stricter in their lending activities. Instead, they should be more eager to lend to MSMEs.

The BSP already has several programs aimed at helping MSMEs access funds, such as the establishment of the credit surety fund.

CSF is a trust fund composed of contributions from cooperatives and provincial governments to help MSMEs access bank loans even if they don’t have collateral.