Outlook on savings and loan associations positive – BSP
THE Bangko Sentral ng Pilipinas (BSP) gave a positive outlook on the nonstock savings and loan association (NSSLA) industry this year despite the coronavirus disease 2019 pandemic.
In a virtual briefing on Thursday, BSP Governor Benjamin Diokno cited the sector’s “stable performance, sustained profitability, and opportunities for growth and improvement” for the outlook.
NSSLAs are nonstock corporations that aim to promote the economic well-being of their members. They accumulate the savings of their members and use this to extend loans to members for home building and development, and personal finance.
These firms also accept deposits from and grant loans to their members and do not transact with the general public.
NSSLAs’ resources are projected to pick up by about 5 percent at the end of the year, according to Diokno.
“Loans and net income are also projected to rise, although at a slower pace due to a slowdown in lending activities,” he said.
The Bangko Sentral chief also said the industry’s financial condition and operations remained strong and stable.
By making financial products and services affordable and accessible to its 1.4 million members, the industry also serves the needs of the underbanked and those underserved by other financial institutions, he added.
At present, 63 NSSLAs cater to the needs of well-defined individuals, including military and uniformed personnel, public and private school teachers, public- and private-sector employees, and market vendors.
“The industry has 291 branches nationwide and have also initiated the use of technology in their transactions,” Diokno said.
The industry’s assets rose by 14.9 percent to P260.2 billion at end-2019 from P226.4 billion at end-2018. These are composed mainly of loans, which soared by 16.1 percent to P205.5 billion from P177.1 billion year-on-year.
At end-2019, 86.8 percent of these assets came from MUP NSSLAs, which continue to have the biggest contribution to the industry’s resources.
As part of their strategic priorities, Diokno announced that NSSLAs have expressed interest to invest in digitizing their operations.
The “BSP encourages this, as technological advancement in their processes is seen to lead to improved, continuous and seamless delivery of financial services to their members,” he said.