Non-stock Savings and Loan Associations (NSSLA) Industry at ₱271.2 Billion

Non-stock savings and loan associations (NSSLAs) are being urged by the Bangko Sentral ng Pilipinas (BSP) to innovate their operations and processes to remain competitive with fintech firms.

“We expect them to innovate and make use of information technology to keep themselves competitive relative to fintech companies. These NSSLAs should also take that into consideration if they want to remain competitive and also reduce the cost of doing their businesses,” said the assistant governor of the BSP’s Financial Supervision Sub-Sector II Arifa Ala.

Aside from being non-stock, NSSLAs are also non-profit organizations that provide long-term financing to members for establishing or developing a home and for personal finance.

The NSSLA industry is still considered stable as it experienced a rise of 4.3% to ₱271.2 billion from ₱260 billion in end-2019, according to BSP Governor Benjamin Diokno.

As of end-March, the industry reported capital contributions amounting to ₱132.55 billion with its loan book reaching ₱238.9 billion. The BSP hopes to maintain the stability of the industry through the enhancement of corporate governance guidelines for NSSLAs.

“Effective corporate governance is the foundation of safe and sound business operations, and it embodies the principles of fairness, accountability, and transparency. It also provides a crucial anchor for sound risk governance practices that enables NSSLAs to be responsive in identifying, understanding, measuring, and managing risks,” explained Diokno.

Source: PhilStar