by Raynan A. Larosa
The country's lack of credit information is a perennial problem that has plagued us for decades. Loan applications are either delayed or denied, and more often than not, lenders impose exorbitant interest rates and collaterals to buffer the credit risk associated with the loan.
Studies show that small and medium enterprises (SMEs) alone make up more than 95 percent of enterprise in the Philippines, and it appears harder to grant financing assistance to them. Lenders often require documentation not possessed by individuals and SMEs, such as audited financial statements and income tax returns. Of course, blame cannot be placed on the lenders as there is now way for them to assess the borrowers' payment habits, so why risk capital loss?