BSP teams up with IFC to develop movable asset finance market
BSP Governor Eli Remolona and IFC country head Amena Arif IMAGES: BSP.GOV.PH and IFC PHOTO
MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is partnering with the private sector arm of the World Bank Group to jointly develop a finance market that will help small businesses and agricultural entrepreneurs access credit even if a borrower has no real property to serve as collateral.
In a statement on Wednesday, the BSP said it has partnered with the International Finance Corp. (IFC) to promote movable asset finance (MAF).
MAF is an innovative lending approach that allows borrowers to secure loans using movable assets such as inventories, receivables and equipment.
This approach is designed to benefit borrowers who lack real property to serve as loan collateral, particularly those from the micro, small, and medium enterprises (MSMEs) and agricultural sectors.
The partnership
A 2022 study by the IFC showed that finance involving movable assets in the country remained under 5 percent.
Under a memorandum of understanding signed by the BSP and IFC on March 17, the partnership will focus on regulatory reform, sector capacity building and supporting services development.
The tie-up between the central bank and the World Bank Group unit will run until 2027.
In the Philippines, IFC is now led by its country manager, veteran Pakistani banker Amena Arif.
Financial inclusion
“With this, MSMEs and agri-enterprises can use their available assets to access financing for their working capital and other needs,” BSP Governor Eli Remolona Jr. said.
For her part, BSP Deputy Governor Bernadette Romulo-Puyat added that the partnership between the BSP and IFC aligns with the vision of financial inclusion toward inclusive growth and financial resilience stated in the National Strategy for Financial Inclusion 2022-2028.
READ: Explainer: What is IFC doing in the Philippines?
Financial inclusion means that individuals and businesses have access to affordable financial products and services like credit to meet their needs.
That said, the BSP wants 70 percent of adult Filipinos to be included in the formal financial system by 2023.
The proportion of Filipinos with bank accounts reached 65 percent of the adult population in 2022.
