CEBU CITY, Cebu, Philippines — Micro, small and medium enterprise (MSME) businessmen in Cebu are strongly pushing for the country’s banking sector to ensure easy availability of loan funds in order to ease their financial difficulties which hinder their maximum capacity to grow.

Key industry stakeholders in Cebu note that while there is liquidity in the country’s financial sector today, only a handful of the MSMEs have access to these funds as loans for capital expenditures to be used either to start or expand a business.

“There is a certain ‘disconnection’ when it comes to banks selling their products to the entrepreneurs and the latter maximizing these products for their actual needs,” said Jay Aldeguer, chairman of the Philippine Retailers Association of Cebu (PRA-Cebu).

Aldeguer said that amid the excess liquidity in banks, the MSMEs still find it difficult to access these funds because of the daunting requirements that discourage entrepreneurs, especially start-ups, to capitalize on these funds for loans.

He said that due to the “intimidating factor” of banks, majority of the small-scale entrepreneurs prefer to borrow money from family members or relatives.

“MSMEs today are made up of younger entrepreneurs who are themselves dynamic, hence the banking industry needs to be dynamic as well in creating products that offer, for example, short-term loans, etc.,” added Aldeguer, who is also the president and chief executive officer of The Islands Group.

Likewise, Mandaue Chamber of Commerce and Industry (MCCI) board of trustee Glenn Anthony Soco noted that one of the reasons why entrepreneurs have difficulty in obtaining loans from the banks is because majority of the banking institutions strictly uphold a “credit-scoring” practice where a potential borrower is assessed on his ability to pay the loan to avoid high delinquencies.

Pointed out Soco, “The credit-scoring system is highly important for the banking sector and beneficial for MSMEs who have good borrowing track record. But how can an MSME player, say a sari-sari store, achieve high credit scoring if they don’t have any track record yet?”