BSP Revises Reports on Microfinance and Related Accounts in FRP

The Bangko Sentral has revised its key reports required from banks on microfinance (MF) and related accounts to generate a comprehensive and more accurate picture of the scale and scope of banking services delivered to the micro, small and medium enterprises (MSME) in the country. The Monetary Board, in its Res. No. 893 dated 5 June 2014, approved the revisions of the present reportorial requirements of banks offering microfinance loans and loans to microenterprises as well as the changes in the definitions of related accounts in the Financial Reporting Package (FRP). This enhanced data collection will enable to BSP to more accurately assess the situation and thereby craft evidence based policies that are responsive to the needs of the market.

The monthly report, “Report on Microfinance Loans Outstanding”, is renamed “Report on Microfinance Products” in recognition of the expanding menu of financial services which now include micro-deposits and wholesale MF loans. Micro-deposits are savings accounts, with average daily balance of not more than P40,000, that cater to the needs of low-income clients. Wholesale MF loans, on the other hand, refer to loans granted by wholesaler banks to conduit financial entities (the “retailers”), such as banks and non-banks, for on-lending to qualified end-users.

Also, the quarterly report, “Income Statement on Microfinance Operations”, is renamed “Income Statement on Retail Microfinance Operations” to clarify that this report pertains only to a bank’s “retail” MF operations, e.g. borrowers are the end-users; and does not include its regular lending and wholesale MF lending operations, if any.

All banks, whether engaged in MF operations or not, are required to submit both the monthly and quarterly reports. Those banks with no MF operations, however, are expected to fill up only the item, “Other Microenterprises Loans” while those banks engaged only in wholesale MF lending are required to fill up only the item, “Wholesale Microfinance Operations” and its related sub-accounts under the monthly report, “Report on Microfinance Products”. All banks, however, are required to submit the quarterly report, “Income Statement on Retail Microfinance Operations”, indicating that the required data are not applicable.

Moreover, the account “Microfinance Loans” in the FRP is renamed “Microenterprise Loans” to align with the other related account, “Small and Medium Enterprises Loans” which is based on the type of borrower(s) under the present “Magna Carta for Micro, Small and Medium Enterprises”. Further, all references to “microenterprises” are removed from the definition of the account, “Small and Medium Enterprises Loans” to avoid any inconsistency in the definitions.

These revisions are expected to improve the quality of data being submitted by banks which serve as inputs in formulating policies to further enhance the present regulatory environment in support of MSME lending.

Source: http://www.bsp.gov.ph/publications/media.asp?id=3444