Lenders with borrower-friendly business loans get BSP perks

Lenders with borrower-friendly business loans get BSP perks

By Lee C. Chipongian

The Bangko Sentral ng Pilipinas (BSP) will grant regulatory incentives for banks and lending companies that will implement the standardized business loan application form (SBLAF) ahead of the mandatory adoption of April 28, 2024.

In a memo (BSP Memorandum No. M-2024-004), BSP Deputy Governor Chuchi G. Fonacier said that the regulatory perks for the early adoption of the SBLAF templates which was approved in a Monetary Board resolution last Dec. 28, 2023, took effect immediately.

Fonacier said for early adopters, the incentive is in the form of a reduction in the annual supervisory fee (ASF) for 2024 and 2025.

The BSP will reduce the ASF for these banks and lending firms to 20 percent of the assessed ASF or P2 million, whichever is lower.

Early adopters are those that will adopt the SBLAF by Oct. 28, 2023, or six months ahead of the mandatory adoption of April 28 this year.

According to the memo, the SBLAF templates are deemed to have been fully implemented if the following conditions are met: the prescribed templates are exclusively used for all covered loan applications (under the appropriate BSP circular); and the prescribed templates, in printed or electronic form, are accessible in all applicable channels such as branches, offices, agents, online portals, apps -- where borrowers may submit their covered loan applications.

The BSP approved the SBLAF in 2022 to improve access of micro, small and medium enterprises (MSMEs) to credit and financial products.

The borrower-friendly SBLAF is contained under BSP Circular No. 1156 to basically streamline and to make more efficient and transparent MSMEs’ loan application process.

“The SBLAF (is) expected to help MSME borrowers better familiarize themselves with the loan process and find formal loan applications less intimidating,” the BSP said.

The BSP said that adoption of the SBLAF will facilitate faster loan processing by increasing usage of digital loan application platforms.

The SBLAF will also support credit data requirements for credit registries as well.

“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,” said the BSP. The council includes the Small Business Corp., Landbank of the Philippines, Development Bank of the Philippines, Credit Information Corp. (CIC), as well as banking sector and microfinance NGO representatives.

Meantime, the SBLAF templates were developed in close coordination with the technical working group composed of the following: Bankers Association of the Philippines, Cooperative Banks Federation of the Philippines, Chamber of Thrift Banks, Rural Bankers Association of the Philippines, Department of Trade and Industry - Small Business Group and Bureau of Small and Medium Enterprises, Philippine Guarantee Corporation, CIC and the BSP.

The SBLAF templates for loan application is the borrower’s primary application screening tool. It include the borrower information sheet and the list of supporting documents.

The BSP expects the SBLAF will improve a financial institutions' risk assessment, hasten turnaround time, and facilitate transition to digital loan application platforms. The templates will likewise improve the gathering of data requirements for an improved and consistent credit information services.

Covered entities include government non-bank financial institutions, stand-alone financing or leasing companies with quasi-banking license, and credit granting entities under BSP supervision.