BSP eases rules for bank lending to MSMEs

The Bangko Sentral ng Pilipinas (BSP) has implemented measures to ease rules for banks, allowing them to provide more credit to micro, small, and medium-sized enterprises (MSMEs) affected by the COVID-19 pandemic.

The Monetary Board approved prudential measures that include reducing the credit risk weights of loans granted to MSMEs in current status from 75% to 50%, and assigning a zero percent risk weight for loans guaranteed by government agencies.

These changes aim to free up capital, enabling banks to extend more credit to MSMEs while ensuring the stability of the financial system.

The BSP also deferred the implementation of the revised risk-based capital framework applicable to stand-alone thrift banks, rural banks, and cooperative banks until January 1, 2023, providing these institutions with enough time to meet new minimum capital ratios without disrupting their operations.