New Cebu bankers prexy vows to reach out to SMES
Cebu bankers aim to reach out to the Small and Medium Entrepreneurs to bridge the gap between financial institutions and the industry players in terms of accessing credit facilities.
Newly elected Cebu Bankers Club president Gino C. Gonzales made this commitment noting that despite efforts of the banks to encourage lending, there are still a lot of SMEs who do not consider banks as their primary source for capital requirements.
Obviously, he said there is lost information in between that needs to be addressed and that SMEs should be educated on the bank’s requirements, as well as openness to lend.
Gonzales, who is also the area head for Central Metro Cebu area for Philippine National Bank said that the bankers will be working with the business organizations like the Cebu Chamber of Commerce and Industry, Mandaue Chamber of Commerce and Industry, and the Filipino-Cebuano Business Club Inc., on this plan.
According to Gonzales there is a need for SMEs to be updated and be more oriented on the banks' available credit products for the corporate market, specifically the SME community, which comprise over 90 percent of the businesses in the country.
Banks' primary requirement for a loan for instance are-credit history, collateral, and financial standing. If one is into business, there is no reason why they can’t avail of credit facility from the banks.
In a separate interview earlier with business prime mover Jay P. Aldeguer, he said that there is an obvious vacuum between SMEs and the banking institution.
“Banks are still maintaining intimidating factors. Clearly, there is a huge ‘disconnect’ between the financial institutions, and the business sector,” said Aldeguer adding that this problem should be taken in consideration in the banking sector, specifically that the Philippines need to pump prime its economy to sustain growth, amid the fragile economic global condition.
According to Aldeguer, there is need for banks to reexamine and understand the changing needs of today’s young and vibrant entrepreneurs.
At present, he said most products of the banks are not entrepreneur-friendly and most do not cater to the needs of the ones that desperately need it.
The younger entrepreneurs now are very dynamic, they have different capitalization requirements, and come from diverse family background. Thus, the banks should also be as dynamic as the new generation of Filipino entrepreneurs now.
Likewise, Mandaue Chamber of Commerce and Industry board of trustee Glenn Anthony O. Soco, said that despite the swelling liquidity in the financial system today, the MSMEs sector is still having difficulties to access funds for expansion, because of discriminating requirements that discourage small and medium entrepreneurs to expand their businesses.
“I hope that the government is true to its words that credit is widely available. Yes, we have excess liquidity, but the small and medium players should also be given opportunity to access the funds through credit,” Soco said.
Access to financing, has been a long over-due call from the MSMEs. Soco said now that the Philippines is facing a very fragile economic environment, which can be easily contaminated by the crises faced by economic giants, it has to boost its own private sector.
Economist Jonas Ravelas of Banco de Oro Universal Bank said the private sector should take advantage of the country’s excess liquidity in the banking system, as there are less loan takers due to the uncertainty of the economy.
Ravelas urged the traders to build good relationship with the banks in order to avail of credit for expansion of their respective businesses, saying it is now time to take advantage of credit facilities in the banks because of low interest rates.
Ravelas however warned that the banking institutions are strictly upholding its “credit scoring” practice to avoid high delinquencies in the future.