RCBC to keep extending support to SMEs
RCBC to keep extending support to SMEs amid COVID-19 pandemic
Rizal Commercial Banking Corp. (RCBC) has continued to assist the country’s small and medium enterprises (SMEs) through the implementation of debt relief measures, despite the prevalence of COVID-19 pandemic.
The universal bank’s clients can continuously avail its recovery program, known as COVID Assistance and Recovery (CARE) program, according to RCBC first senior vice president and head of the SME Banking Group Maria Angela V. Tinio at an open virtual roundtable session of the SME Finance Forum.
The CARE program involves the bucketing of SME borrowers into a color-coded classification scheme, depending on the severity of the pandemic’s impact on their operations, and the creation of appropriate refinancing packages for each color code.
“RCBC intends to continue the program in support of our customers, especially during the pandemic,” Tinio said.
The SMEs are considered the backbone of the economy, comprising over 99 percent of all businesses. Supporting SMEs is critical not only through financing but also by becoming an enabler for better cash management through digital collection and payment solutions.
Other key takeaways are the value of looking at alternative tools of underwriting that are more current and methods of credit scoring that are more dynamic; and the usefulness of a collaborative approach involving banks, government, sector and industry sector.
Meanwhile, the Philippine government has also initiated support measures such as the Financial Institutions Strategic Transfer (FIST) Law that allows financial institutions to offload their non-performing assets (NPAs) and guarantee programs under the Philippine Guarantee Corporation to encourage banks to continue lending to small businesses. The Securities and Exchange Commission (SEC), in coordination with other government agencies and the private sector is also encouraging more SME firms to get listed at the Philippine Stock Exchange.
Tinio likewise lauded the monetary authorities for incentives introduced to assist SME. For instance, the Bangko Sentral ng Pilipinas (BSP) accepts lending to SMEs as alternative compliance to reserve requirements.
RCBC is one of the newest members of the SME Finance Forum, a global network of more than 200 financial institutions, technology companies, and development finance institutions that serves as a platform to exchange knowledge, spur innovation, and promote the growth of SMEs worldwide.
The SME Finance Forum launched the Virtual Roundtable Series last year as part of its efforts to manifest its commitment to supporting its members and partners during the COVID-19 pandemic. The 31st session of the virtual series entitled “Transitioning from Relief to Recovery”, discussed how financial institutions worldwide are managing their portfolios as subsidies, accommodations and support programs are nearing expiry.
The panel was moderated by SME Finance Forum CEO Matt Gamser and featured speakers from the banking sector in the Asian and MENA regions, including a credit rating agency specialized in rating SMEs in Europe.