Trusted credit data unlocks SME financing

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Small and medium enterprises remain crucial to Philippine growth, but weak credit data continues to limit their access to financing despite their large role in business activity and job creation.

SMEs account for 99.6 percent of Philippine businesses and 67 percent of employment, according to a Bangko Sentral ng Pilipinas presentation citing Philippine Statistics Authority data.

Limited access to credit prevents many firms from expanding operations, investing in new opportunities, creating jobs, and building long-term resilience.

CIBI Information Inc. said the challenge is rooted in a data gap that prevents lenders from accurately evaluating the creditworthiness of viable businesses.

Many lenders still depend on fragmented or incomplete information, as well as manual and inefficient data collection and risk assessment processes.

These gaps often lead to slower onboarding, higher perceived risk, and lower loan approval rates for businesses that need capital.

“Many lenders still face challenges in assessing SMEs due to fragmented data and manual onboarding processes,” said CIBI Head of Individual and Business Credit Solutions and Partnerships Edith Roberto at an industry event on positive credit awareness and discipline.

“Limited visibility into SME operations makes it difficult to accurately assess creditworthiness, contributing to higher perceived risk and lower loan approval rates despite strong demand for financing.”

The World Bank’s 2025 Philippines Economic Update said the share of businesses using banks, nonfinancial institutions, and supply chain finance for investments is among the lowest in the region.

The same update noted that Filipino companies are more likely to be rejected for credit than their regional peers, with challenges linked to the absence of a comprehensive credit registry, limited use of alternative credit scoring models, and firms’ inability to produce collateral.

Bridging the gap between access and growth will require comprehensive, structured, and reliable data.

CIBI said more banks and financial technology firms are adopting data-driven processes across the credit underwriting lifecycle.

This approach allows lenders to identify high-potential borrowers, conduct due diligence more efficiently, and streamline credit assessments using stronger risk indicators.

Financial institutions are also using data beyond initial loan approval to monitor early risk signals and trends.

Data also allows lenders to benchmark borrower performance against peers and broader market trends.

“Every decision enabled by trusted data helps expand access to credit for more Filipinos, strengthen trust across businesses and institutions, promote responsible lending and hiring practices, and ultimately, support a more resilient and inclusive economy. When decisions are powered by trusted data, opportunities become more accessible for everyone,” said Roberto.

CIBI said it supports lenders by providing access to structured and reliable business data that can improve SME credit assessment.

Credit bureaus such as CIBI provide actionable reports that include in-depth business profiles, financial trend analysis, and risk insights.

These tools help lenders make faster and more informed decisions throughout the underwriting process.

Improving SME access to financing remains critical to sustaining business growth in the Philippines.

CIBI said stronger data infrastructure and more efficient credit evaluation systems can help lenders assess risk more accurately.

With better access to reliable information, lenders can extend financing to viable businesses that may otherwise be overlooked.