Posted on January 11, 2012 10:56:38 PM
THE NUMBER of microfinance borrowers inched closer to the one million
mark last year amid sustained policy reforms by the Bangko Sentral ng
Pilipinas (BSP).
In the "2011 Year-End Report on BSP Financial Inclusion Initiatives"
posted on its Web site yesterday, the central bank pointed out the
number of microfinance borrowers rose by 3.33% to 963,717 as of June
last year from 932,622 as of September of the previous year.
Outstanding loans jumped to P7.149 billion as of June from P6.532
billion as of September.This was despite a slight decline in
microfinance banks to 198 last year from 202 in the previous year.
The BSP also said it received 100 applications to establish 700
micro-banking offices after releasing Circular 694 in October 2010 that
allowed banks to establish MBOs.
Summing up its work in the area of financial inclusion last year, the
BSP said it continued to promote access to financial services through
enabling policies, among others.
"... the BSP has assiduously and steadily worked through the areas of
policy and regulation; training and capacity building; and promotion and
advocacy," it said.
The BSP issued new circulars last year to "further solidify the efforts
towards financial inclusion," which envisions access by the poor to
formal financial services such as credit and insurance.
The central bank issued Circular 706 in January 2011 that allowed banks
to use a risk-based system for classifying clients (low, average, high
risk) and to contract out to third party service providers certain
functions such as face-to-face know-your-customer that is usually done
when new clients open deposit accounts.
Circular 725 issued in June 2011 governs the relationship between banks
and their related microfinance nongovernment organizations (NGOs). The
rules state that the bank and the NGO must observe contractual
agreements and no bank personnel shall hold a full-time job in the NGO.
The BSP also updated the implementing rules of the Truth in Lending Act
by issuing Circular 730 in July. The new rules require banks to charge
interest on the outstanding balance of a loan at the start of the
interest period.
It issued the implementing rules to provisions in Republic Act 10000 or
the Agri-Agra Reform Credit Act that affect banks.
The central bank also doubled the existing cap on microfinance loans to
P300,000 to allow banks to provide more financing to clients.
Moving forward, the central bank said it will do the following:
• continue to review consumer protection principles as possible
regulatory tools;
• establish a comprehensive financial inclusion data framework to
monitor progress and inform policy making; and
• enhance the role of non-bank financial institutions in financial
inclusion.
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