200 banks join microfinance bandwagon
By Ted Torres (The Philippine Star) | Updated April 2, 2013 - 12:00am
MANILA, Philippines - There are 200 banks and another 2,000 microfinance
institutions (MFIs) in the Philippines servicing at least seven million
microfinance clients, based on a study released recently by the Asian
Development Bank (ADB).
The study reported that majority of the commercial banks catered
indirectly to the microfinance sectors-- through their socially-oriented
foundations -- by providing wholesale funds to private institutions
engaged in retail microfinance services.
"Some commercial banks, however, opted to establish their own rural or
thrift banks that are wholly engaged in microfinance operations," it added.
The Bank of the Philippine Islands (BPI) for example established BPI
Globe BanKO, a thrift bank utilizing mobile phone technology to extend
microfinance.
The Rizal Commercial Banking Corp. (RCBC) operated its own microfinance
oriented thrift bank, the Rizal Microbank.
While East West Banking Corp. acquired a Mindanao-based rural bank to
establish a microfinance platform.
The ADB reported that the Philippines is considered one of the countries
in Asia with a relatively developed microfinance industry that provides
financial services to the low-income sector.
The Economist Intelligence Unit (EIU) recognized the Philippines as one
of the countries in Asia with "very strong regulatory regimes and good
prospects for MFIs to enter the sector and perform effectively" for
three consecutive years (2009-2011). In 2010-2011, the country was
adjudged as having the best microfinance regulatory framework among 54
countries.
But the report said that the challenges remain enormous.
The National Statistical Coordination Board (NSCB) reported that poverty
incidence in the Philippines remains one of the highest, next to
Cambodia with 30.1 percent and Lao People's Democratic Republic with
27.6 percent in 2010.
The poor still do not have access to various types of financial services.
The 2011 World Bank report on the finance sector reported that only
about 30 percent of Filipinos used formal financial services (lower than
the East Asia average).
It said that while branches of formal financial institutions have been
increasing, access to and use of financial services have remained
limited for poorer and more rural areas.
This was further substantiated by an NSCB report that among the basic
sectors, fisherfolk had the highest poverty incidence at 41.4 percent in
2009 followed by farmers at 35.7 percent.
"One of the perceived barriers is the lack of or inadequate access to
financial services of the poor, which has been mostly limited by
geographic distance, high cost of services, inappropriate products, and
stringent and tedious documentary requirements," the ADB report added.
More attention must be given to the financial literacy of the poor,
consumer protection, and accountability to customers to ensure sound
microfinance practices and that the poor have access to safe financial
services.
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CARLOS ANI - Consultant
Chairman of the Board - SEEDFINANCE Corporation
Mailing address: PO Box 90 UPLB Los Banos Laguna, Philippines 4031
Emails: carlosani@gmail.com , carlosani@seedfinance.net
Landline Phone: +63495010127 (PLDT)
Cellphone Numbers: +63908-1737072 (Smart)
My Websites:
CARLOSANI.COM - http://www.carlosani.com
SEEDFINANCE Corporation - http://www.seedfinance.net
DEVJOBS - http://www.devjobsmail.com
PHILDEVFINANCE - http://phildevfinance.posterous.com
http://phildevfinance.blogspot.com
Family website - http://www.anifamily.net
Skype name: carlosaniph
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