Marcos eyes credit scoring as basis for loans to MSMEs

By Samuel P. Medenilla @sam_medenilla

PRESIDENT Ferdinand R. Marcos Jr. is now eyeing to establish a credit-scoring system as basis for providing loans to micro-sized, small-scale and medium-sized enterprises (MSME).

In his speech for a conference of MSMEs delivered by Executive Secretary lucas P. Bersamin last Tuesday, Marcos said this was among proposed initiatives to support MSMEs.

“We will help in expanding access to financing for MSMEs, including the expansion of loan programs, credit guarantee schemes and the establishment of a credit scoring sys- tem to facilitate lending decisions,” Marcos said.

The World Bank defines credit scoring as a “form of statistical analysis that provides an estimate of the probability that a loan applicant, existing borrower or counterparty will default or become delinquent.”

In its 2019 credit-scoring approaches guidelines, the Washing- ton-based lender said that credit scoring is a valuable tool to provide MSMEs with credit access.

Aside from credit access, Marcos said the government will also provide MSMEs with digital-literacy training and support for diverse e-commerce platforms.

Marcos stressed the importance of boosting the global competitiveness of the MSMEs to “transform the Philippine economy and society,” since they make up 99 percent of all registered businesses nationwide and employ 5.4 million workers.

The president said he considers the “National MSME Summit 2023” as a venue where stakeholders can collaborate to come out with initiatives for MSME development.

The conference’s “discussions on building a robust tech startup ecosystem, integrating MSMEs into domestic and global value chains, strengthening the regional innovation and entrepreneurship landscape and honing the capabilities of our workforce are indeed most welcome,” Marcos said.

Providing support to MSMEs is embodied in Republic Act 9501, or the “Magna Carta for Small Enterprises.”

The law said “the State shall recognize the specific needs of the MSMEs and shall undertake to promote entrepreneurship, support entrepreneurs, encourage the establishment of MSMEs and ensure their continuing viability and growth and thereby attain countryside industrialization by…” “instituting safeguards for the protection and stability of the credit delivery system,” among others.

Section 6 of the law also mandates the approval by the President of a 6-year MSME development plan prepared by the Department of Trade and Industry.

“Such plan shall include a component on a micro credit financing scheme,” the law states.