The Bangko Sentral ng Pilipinas (BSP) has raised to P300,000 the loan ceiling on the microfinance credit that 200 authorized banks may grant to borrowers who have completed two loan cycles.
New rules on microfinance—contained in BSP Circular 744—now allow the authorized banks to offer the “Microfinance Plus” loan to their clients seeking to grow their microenterprises and small businesses.
“As microenterprises grow with their loan cycles, they may need larger loans that can not be currently served by microfinance institutions and may be deemed too small by traditional banks,” the BSP said.
The 200 banks permitted to offer microfinance products serve almost one million clients, according to BSP data.
Alongside Circular 744, the BSP also issued Circular 748 on micro-agri loans to give banks the “flexibility to innovate on the design of their micro-agri loan products to better attune them to the peculiarities and cycles of various types of crops.”
Only those banks with “the appropriate risk management systems in place” will be allowed to innovate on their micro-agri loans on a product approval basis.
“These regulations further demonstrate the BSP’s commitment to create the environment which will allow banks to continually innovate to become more responsive to their client needs, diversify their income streams and ultimately increase the value of their services particularly to the unserved and underserved markets,” the BSP said. — ELR, GMA News
source: gmanetwork.com
