Credit info bureau to speed up rural lending
By Ted P. Torres (The Philippine Star) | Updated November 25, 2012 - 12:00am
MANILA, Philippines - Accurate and accessible credit information to
rural banks will speed up the flow of credit for rural development,
according to the Credit Information Corp. (CiC).
CiC president Baltazar N. Endriga said this lowers the risk of lending
and the cost of borrowing and doing business for farmers, fisherfolk and
other small enterprises primarily served by rural banks.
"This could have a far-reaching impact on the development of the
countryside and the Philippine economy in general," Endriga said during
a recent symposium sponsored by the Rural Bankers Association of the
Philippines (RBAP).
Rural banks play a strategic role in serving the credit needs of the
countryside, having over 2,500 offices nationwide and catering
especially to micro, small and medium enterprises which account for 99.6
percent of all enterprises and generate 76 percent of total employment.
Likewise, rural banks spread throughout the archipelago have become
conduits for microfinance and microinsurance products that serve
low-income Filipinos.
Latest available data from the Bangko Sentral ng Pilipinas (BSP) show
that rural banks extended P109.76 billion in loans as of end-March 2012.
"In addition to having a wider geographical footprint, rural banks also
have a deeper understanding of the character, peculiarities and needs of
their clientele," Endriga added.
But processing loan applications and data gathering from the field still
prove to be tedious and costly for many rural banks, he said.
By gaining access to CiC's database, rural banks will be able to enhance
their knowledge of the borrower's credit history, and better manage
cases of multiple borrowings and over-indebtedness.
Another concern of the country's credit information bureau is the inflow
of credit information coming from bank and non-bank financial
institutions, otherwise known as "submitting entities."
"Submitting entities" include banks, insurance companies, utility firms,
telecommunications company (telcos) and other types of institutions that
extend credit.
Republic Act (RA) 9510 or the Credit Information System Act mandates all
submitting entities to share both their negative and positive data with
the CiC.
When operational, the CiC will be the leading provider of independent,
secure and accurate credit information in the country to address the
credit information gap.
The CiC is a government-owned and -controlled corporation 60 percent
owned by the government and 40 percent by the private sector. The
private sector stakeholders consist of the Philippine Cooperatives
Center (PCC), Bankers Association of the Philippines (BAP), Credit Card
Association of the Philippines (CCAP), Chamber of Thrift Banks (CTB),
Rural Bankers Association of the Philippines (RBAP) and the Philippine
Credit Reporting Alliance (Philcrea).
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