SB Corporation to lead non-collateral loan movement

Recognizing the need to implement credit assessment models that are less dependent on the capacity of mSME borrowers to put up collateral, Small Business Corporation (SBC) together with Capacity Building International, Germany (InWent) will launch a Risk-Based Lending Movement on July 23, 2008 at the Rigodon Ballroom of The Peninsula Manila.

The launching will jumpstart a series of nationwide meetings and consultations to promote risk-based mSME lending and the Borrower Risk Rating System technology.  The movement will culminate in a 5-day summit within the first semester of 2009. The Summit is expected to influence more financial institutions to adapt the risk-based lending and to mSME financial literacy.

“SB Corporation has been going around the country’s key cities to promote and train financial institutions on the use of borrower risk rating (BRR) system. Risk based lending will help mSMEs gain more access to financing especially from formal sources because collateral will no longer be a main determinant of borrower eligibility,” SB Corporation Chairman and CEO, Virgilio Angelo said.

Gracing the event is Mr. Jaouad Berrada of the International Credit and Finance Consultants Inc., a Canadian company recognized world wide for its unique and comprehensive approach to credit, market and operational risk management.  Mr. Berrada developed the risk-based lending system of SBC with funding from the Asian Development Bank.

“This  forms part of our efforts to create an enabling environment for mSMEs to flourish. With the imminent full implementation of the amended Magna Carta for mSMEs, SB Corporation is gearing up by advocating an  open credit system with a more level playing field, where mSMEscancompete without disadvantages, as they aim for greater competitiveness, stability and growth,” Angelo explained.

The event will be highlighted with a ceremonial signing of a Pledge of Support for the Movement by representatives of various sector such as bank associations, SBC’s ODA partners, government institutions like the Bangko Sentral ng Pilipinas (BSP), mSME trade associations and others.