IFC, GTZ provide assistance to spur Philippines Central Bank’s SME lending

Microfinance Focus, July 24, 2010: World Bank’s International Finance Corporation (IFC)and German government development agency (GTZ) are providing technical assistance to the Philippines’ central bank to strengthen its supervisory and regulatory capacity for lending to small and medium enterprises. Deutsche Bank Risk Management Advisory has been chosen to provide advisory services on risk management best practices.

Greater support from central bank supervisors for commercial banks specializing in lending to small and medium enterprises is expected to increase much needed credit flow to the sector. A study last year by UPS Asia Business Monitor showed that more than 83 percent of small and medium enterprises in the Philippines have experienced difficulties in accessing credit from banks.

“Many banks are interested in using new products and risk assessment methodologies to profitably address the needs of small and medium enterprises,” said Will Beloe, IFC Head of Advisory Services in the Philippines.  “The central bank recognizes this need and has made it a priority to develop a specialized team of small and medium enterprise experts.”

The Filipino central bank has successfully trained their supervisors to specialize in supporting microfinance institutions, and is looking at similar training to support commercial banks’ small and medium enterprise lending operations.

Lukas van der Hoef, Head of Risk Advisory Services Asia at Deutsche Bank, said, “This project is important and is part of our efforts to share the latest risk-management techniques and technology with banks and regulators around Asia to strengthen the local banking systems and ensure their stable and continued growth.”

IFC aims to increase access to financial services for small and medium enterprises globally.  This program is supported by the Canadian International Development Agency and the Australian Agency for International Development.  GTZ supports the program through its Private Sector Promotion Program.

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