BSP launches credit scoring system to boost MSME financing

The Bangko Sentral ng Pilipinas (BSP) has introduced a new web-based credit scoring system to enhance financing for micro, small and medium enterprises (MSMEs), as loans to this sector continue to fall short of the mandated quota.

As of the second quarter, loans to MSMEs only reached P540.9 billion, representing 4.6 percent of the total banking system loan portfolio, significantly below the 10 percent required by the Magna Carta for MSMEs.

Economists attribute this shortfall to structural challenges such as limited borrower credit histories and higher monitoring costs for banks, rather than a lack of interest in lending to small businesses.

The BSP's new Credit Risk Database and scoring system is expected to bridge information gaps, enabling banks to assess and price risk more effectively, which should eventually improve MSME access to credit and support entrepreneurship.