22 banks pilot new loan scheme in Mindanao

At the launching of the new credit facility Friday at The Marco Polo hotel, Bangko Sentral ng Pilipinas (BSP) governor Amando Tetangco, Jr. said the central bank and the banking sector will be able to sustain delivery of fast, adequate, and affordable loans to small and medium enterprises with the internet-based Electronic Rediscounting System (ERS).

Tetangco said they want to continue simplifying the process of extending loans to SME borrowers,

The 22 Mindanao banks are now among 130 banks nationwide that form part of the the central bank's ERS. BSP launched the program in Manila last December and in Cebu last March.

Rediscounting is a privilege of qualified banks to obtain loans or advances from the BSP using eligible papers of its borrowers as collaterals.

The credit facility helps banks have more available financial resources by refinancing the loans they extend to their clients. The BSP has remodeled the rediscounting operations many times through the years to be consistent with monetary policies.

But he said the other purpose is to address client banks' demands for fast and reliable delivery of service.

Thorough this scheme, local banks can avail of the service using the internet, thus doing away with long and expensive  trips to Manila to process the loans.

BSP officials and technicians demonstrated the scheme to an audience of around a hundred businessmen, bankers, and representatives from financing stakeholders at the launch.

Nathaniel Mindanao, an executive of the Rural Bank of Kapalong, one of the 22 banks, told MindaNews this would mean more funds to loan, lesser cost to lend money, faster processing time.

The BSP reoirted that the electronic scheme has proven effective in facilitating credit delivery to micro, small, and medium enterprises, even in the countryside.

The BSP reported that as of July 13, seven months after the scheme was launched in Manila, ERS has released total loans of P14.9 billion. He cited a total eRediscounting budget of P20 billion.

Tetangco said they are also encouraging banks to emulate the scheme used by micro finance institutions (MFIs), which extend loans to poor borrowers with less documents and no-collateral to improve accessibility of loans extended to the agriculture sector.

The other banks that signed up in the scheme are the following: Philippine National Bank, Cooperative Bank of Misamis Oriental, Rural Bank of El Salvador (Mis. Or.), Siam Bank, Inc.; Rural Bank of Talisayan (Mis. Or.) Inc.; Bangko Rural ng Tagoloan (Mis. Or.); Bukidnon Bank; Asian Hills Bank, Inc.; Bukidnon Cooperative Bank; Rural Bank of Montevista, Inc; Rural Bank of Sto. Tomas (Davao), Inc.; Tagum Rural Bank, Inc.; Century Rural Bank, Inc.; One Network Bank, Inc.; Rural Bank of Hagonoy (Davao del Sur), Inc.; Rural Bank of President Quirino (Sultan Kudarat), Inc. Rural Bank of Lebak (Sultan Kudarat), Inc.; Peninsula Rural Bank, Inc.; Rural Bank of Alabel, Inc. Cantilan Bank, Inc. and the Cooperative Bank of Agusan Norte-Butuan City.