99% of the workforce are micro, small, or medium businesses, and banks need to support them

[ASEAN NOW News]

MANILA – The number of people working in micro, small and medium enterprises known as MSMEs, is a primary factor why financial institutions should continue to tap the sector, according to a bank’s President.

 

In a virtual briefing yesterday, Bank of the Philippine Island (BPI) president and chief executive officer (CEO) Jose Teodoro Limcaoco said while the MSME sector’s value added on the country’s total output remains small compared to bigger businesses, it “generates a lot of employment in the country and the trickle-down effect also is quite significant.”

 

file photo.

 

“To be honest, I don’t have an idea when they will be significant or even what that means, but I know they are important and that they continue to be important. And it’s a sector that all responsible financial institutions should continue to look at and serve,” he said. 

 

Prior to the pandemic, the government, and the banks, among other institutions, increased their programs to boost opportunities for MSMEs, which employ around 99 percent of workers in the country. 

 

This increased the sectors’ access to financing although some players continue to face challenges for this, especially after the pandemic hit. 

 

Limcaoco said since MSMEs are the economy’s backbone thus, “the more we support them, the better for the country.”

 

“When we help micro-entrepreneurs by giving them access to affordable loan products to fund their operations, we give them an opportunity to grow and to expand their business, which obviously redounds to our country’s economic progress,” he said. 

 

Limcaoco said since the inception of BPI BanKo, the Ayala-led bank’s microfinance arm extended about PHP22 billion worth of loans to over 181,000 MSMEs in 2017. 

 

He said they plan to further digitalize their processes to reach more MSMEs and help them with their financing needs.

 

“Hopefully, this will allow us to reach even lower income segments and increase the share of other economic activities in our lending portfolio,” he added. (PNA)