The Bangko Sentral ng Pilipinas (BSP) and the International Finance Corporation (IFC) have joined forces in a two-year initiative to develop the moveable asset finance (MAF) market in the Philippines.

This partnership aims to increase credit access for micro, small, and medium-sized enterprises (MSMEs) and the agricultural sector by promoting the use of assets like equipment and inventory as loan collateral.

This move addresses the challenge faced by businesses lacking traditional real estate collateral and seeks to broaden financial inclusion, particularly in underserved rural areas.

BSP Governor Eli Remolona Jr. highlighted the significance of this collaboration.

This move addresses the challenge faced by businesses lacking traditional real estate collateral and seeks to broaden financial inclusion, particularly in underserved rural areas.

BSP Governor Eli Remolona Jr. highlighted that this collaboration complements the existing Personal Property Security Act, aiming to significantly increase loans secured by moveable assets, enabling MSMEs and agri-enterprises to access crucial working capital.

BSP Deputy Governor Bernadette Romulo-Puyat noted the initiative aligns with the National Strategy for Financial Inclusion, promoting inclusive growth. The BSP and IFC will also push for regulatory reforms and strengthen sectoral capacities to support MAF development.

An IFC study indicated that moveable asset-backed loans are currently underutilised in the Philippines, and this partnership seeks to encourage more lenders to recognise these assets as viable collateral, thereby expanding credit opportunities.

Featured image credit: Edited from Freepik.