CTB urges BSP to lift moratorium

The Chamber of Thrift Banks (CTB), the umbrella organization of the country’s thrift, savings and development banks, is asking the Bangko Sentral ng Pilipinas (BSP) to lift the moratorium on branching for thrift banks in recognition of their pivotal role in lending to the small and medium enterprises (SMEs) sector.

In a letter to BSP Deputy Governor Alberto Reyes, CTB president Benjamin Yambao also requested that branching rules be liberalized for banks that have maintained lending to SMEs equivalent to at least 60 percent of their portfolio for the last two years.

"Notwithstanding the crisis environment during the past years, the thrift banking industry stayed focus on its niche markets, kept faith with the SMEs and continued to provide the much-needed financial assistance," Yambao said.

At the end of the first semester of 2004, data showed that thrift banks lent out P40.8 billion to SMEs, making it the biggest lender to this sector in the banking industry. It also posted a year-on-year loan growth of close to eight percent during the same period.

The CTB president added that the granting of their request runs parallel to the thrust of President Arroyo’s 10-point economic agenda specifically on job creation since SMEs are the most efficient job generators in terms of jobs to investment ratio.

Over the years, thrift banks have channeled a considerable amount of their resources to small and medium businesses. Even President Arroyo, according to Yambao, has recognized the crucial role of thrift banks in SME development since they are the logical source of credit among SMEs on account of their strategic location especially in the countryside.

At the closing of 2004, there were a total of 1,138 thrift bank branches nationwide.

"With liberalized rules on branching, we can be present in many underserved areas and reach out to a greater number of SMEs," Yambao added.