The Bangko Sentral ng Pilipinas (BSP) has recently issued a circular that aims to standardize the business loan application form for micro, small, and medium enterprise (MSME) that fall under the classification of BSP-supervised financial institutions (BSFIs).
The move is in line with the central bank’s efforts to enhance the availability of financial products and services and foster greater financial inclusion for the country’s business upstarts and other small-scale enterprises.
Streamlining the process for MSME borrowers
BSP Circular No. 1156 provides for a borrower-centric Standard Business Loan Application Form (SBLAF) that will make the MSME loan application process more streamlined, transparent, and efficient.
The SBLAF is also expected to help MSME borrowers better familiarize themselves with the loan process and find formal loan applications less intimidating.
For BSFIs, SBLAF adoption can facilitate faster loan processing and the use of digital loan application platforms. For credit registries, the SBLAF can support data requirements for efficient and effective credit information services.
The introduction of an SBLAF for MSMEs was one of the initiatives identified by the MSME Development Council – Access to Finance Cluster where BSP serves as a member. This cluster includes small business corporations, BSP, Landbank of the Philippines, Development Bank of the Philippines, Credit Information Corporation, banking sector representatives, and microfinance NGO representatives.
The SBLAF templates were also developed in close coordination with the technical working group composed of key stakeholders in MSME finance from relevant banking associations and government agencies.
The technical working group is made up of the Bankers Association of the Philippines, Cooperative Banks Federation of the Philippines, Chamber of Thrift Banks, Rural Bankers Association of the Philippines, Credit Information Corporation, Department of Trade and Industry – Small Business Group and Bureau of Small and Medium Enterprises, Philippine Guarantee Corporation, and the BSP.
The mandatory adoption of the SBLAF took effect on October 28, 2022, or fifteen (15) calendar days following the required publication of the BSP circular on October 13, 2022.
All covered entities will be given up to eighteen (18) months from said effectivity date to fully comply with the SBLAF requirements.
The BSP continues to promote financial inclusion by widening the access of MSMEs to financial products and promoting a regulatory environment that is responsive to their needs.