Digital Banks Key to Recovery of MSMEs, Says BSP

Digital banks play a key role in empowering micro, small, and medium enterprises (MSMEs) in the country, according to the Bangko Sentral ng Pilipinas (BSP). MSMEs make up 99.6% of the total business firms in the country, which make them significant contributors to the economy. Despite this, however, BSP Governor Benjamin Diokno noted that many of these enterprises have faced challenges throughout the global pandemic.

“These include limited access to credit and poor digital adoption due to lack of access to digital and financial infrastructure. In response, the BSP has employed a wide range of regulatory relief measures to assist MSMEs,” explained Diokno. Digital banks can provide financial solutions such as corporate deposits and credit, which can aid the recovery of MSMEs.

Additionally, digital financial offers including quick and easy access to low-interest corporate loans or unsecured credit lines have also been launched to further the support provided for MSMEs. “A common strategy for these digital banks is to engage MSMEs through simple and quick deposit onboarding, then empower them with business solution platforms that facilitate the digitalization of MSME operations,” Diokno added. “All these facilities are accessed through user-friendly mobile and web-based application systems.”

Six digital banks have already been licensed by the BSP, two of which — the Overseas Filipino Bank and Tonik Bank — onboarded 120,000 new digital deposit accounts by end of September 2021. All of these digital banks are, likewise, expected to be completely operational by the end of the year, substantially ramping up digital banking transactions in the country. “Digital banks will significantly contribute to the growth and development of the digital financial ecosystem, catalyzing the attainment of the financial inclusion and digital transformation goals of the BSP,” affirmed Diokno.

Source: Manila Times