The Bangko Sentral ng Pilipinas (BSP) and the Japan International Cooperation Agency (JICA) have launched a new web-based credit scoring system to help banks and other lenders better evaluate the creditworthiness of small and medium enterprises (SMEs).

The BSP and JICA developed the Credit Risk Database Philippines (CRDPh) System, an automated online platform, using anonymised financial and non-financial data that 33 pioneer financial institutions submitted.

Using statistical models, it generates a probability of default and a credit score for SME borrowers. This initiative is the second phase of a BSP-JICA project that began in 2020 and is the first adoption of Japan’s successful CRD model outside of Japan.

The system aims to address information gaps that often make it difficult for SMEs to secure loans.

In a memorandum, the BSP stated that the platform is expected to enhance the financial institutions’ credit risk-based evaluation of SME borrowers, address information asymmetry, improve loan pricing, reduce dependence on collateral and ultimately support access to finance of SMEs.

Unlike a traditional credit bureau, the CRDPh does not provide borrower-level credit histories. Instead, it produces statistical outputs that lenders can integrate into their internal credit evaluation processes.

Banks without their own SME scoring models can use the CRD outputs as a risk assessment tool, while those with existing models can use the data for validation.

Participation in the system is voluntary for financial institutions. For now, the BSP is offering the platform free of charge, although it may introduce a fee structure in the future to sustain operations.

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