BSP pushes establishment of credit bureau for small traders

The Bangko Sentral ng Pilipinas is pushing for the establishment by end-2011 of a credit bureau that will allow credit-worthy enterprises to easily secure bank loans.

According to the BSP, the Central Credit Information Corp. (CCIC) will address the pressing need of micro, small and medium enterprises (MSMEs) for enhanced credit access.

Using data provided by the credit bureau, banks will be able to assess the creditworthiness of MSMEs before granting loans. This setup will actually help accelerate growth in lending, the central bank explained.

Republic Act 9510, which mandated the creation of the CCIC, was signed into law in late 2008. But the credit bureau has yet to be established.

Delays in the establishment of the credit bureau are blamed largely on the reluctance of banks to share vital credit information of their clients, apart from administrative hurdles.

“Banks have not yet fully realized the benefits of sharing data. There must be banks that will take the first initiative to share data so that others will follow,” said Pia Roman, in charge of the MSME initiatives of the BSP.

Under the law, the Securities and Exchange Commission will head the CCIC once it is established. It is expected to be fully operational by 2012.

The credit bureau also must be composed of both government and private-sector shareholders. The government, with the SEC acting as chair of the board, must own 60 percent, while the private sector should control 40 percent.

“The credit bureau is not even registered yet, but we [BSP] hope it is established within the year,” Roman said Tuesday in a forum on MSME development held at the Asian Institute of Management in Makati City.

Most MSMEs find it difficult to secure loans compared with large corporations because banks see them as high-risk borrowers. But with the data to be provided by the credit bureau, banks may get to learn the credit standing of MSMEs.