Centralized credit info system to boost SMEs, says Angara

The creation of a centralized credit information system would enable small and medium scale enterprises to avail of credit for their businesses, Senator Edgardo Angara said yesterday.

Angara is the main author of Senate Bill 1881 or the Credit Information Systems Act which establishes a comprehensive and centralized credit information system in the country.

“We are creating a tool for financial development that can reduce the risk of credit, allow more people to access it, and ultimately contribute to a healthier and more stable financial system,” said Angara, who chairs the Senate committee on banks, financial institutions and currencies.

Angara said the measure would be a major step towards unlocking money because lenders will now be more comfortable to assess their risk of lending. This, he said, will happen because banks will know beforehand the credit history of their borrowers.

Furthermore, Angara said the approval of the Credit Information Systems would enable the country to improve a “constricted” credit system.

“What we do today can expand credit in the country.  We hope that through this system, the flow of credit will be smooth and will enable the formation of a larger credit base,” Angara said.

The lawmaker hopes that companies would be able to gain access to cheaper credit instead of being dependent on lenders that require huge collateral.

The Credit Information System, Angara said, will facilitate the gathering of consumer credit information from financial institutions such as banks, credit card companies, and government lending institutions.

A credit information system will directly address the need for reliable credit information concerning the credit standing and track record of borrowers.

Moreover, through the establishment of a centralized credit information system, credit will be made more available especially to small yet responsible borrowers.

The bill is set to be ratified by the Senate and the House of Representatives before being submitted to the President for enactment.