BSP: Digital banks provide more access to credit for MSMEs

MANILA – The Bangko Sentral ng Pilipinas said digital banks will expand small and medium enterprises’ access to financial services as 3 new neobanks are expected to launch services this year.

With the new form of banking, the BSP said MSMEs will have greater access to credit through “mobile-friendly” lending and investment facilities, the BSP said in a statement.

Thanks to digital banks, sales and payment transaction records can also be used to assess the creditworthiness of MSME borrowers, the central bank said.

“By offering convenient and affordable financial products tailored to the needs of MSMEs, digital banks can accelerate financial inclusion in the country,” said BSP Governor Benjamin E. Diokno.

“BSP remains committed to fostering a regulatory environment conducive to financial innovation while promoting healthy competition in the financial system,” he added.

In 2021, the BSP granted 6 digital banking licenses. Digital banks do not have physical branches with transactions conducted entirely on a digital platform.

Among the 6 digital banks, Landbank’s Overseas Filipino (OF) Bank and Tonik Bank are already operational.

UnionBank’s UnionDigital, Singapore-based fintech-backed UnoBank, Gokongwei Group’s GoTyme and PayMaya’s Maya Bank meanwhile plan to launch their services this year, the BSP said.

In addition to boosting financial inclusion through easier and cheaper onboarding processes, Diokno said earlier that digital banks could spur a “tech” economy. [DRIVE]

Digital banks will also push BSP’s digital transformation roadmap, which aims to digitize at least 50% of retail payments and bring at least 70% of Filipino adults into the formal financial system by 2023.