BSP mulls national survey to measure effectiveness of microfinance industry
By SIEGFRID O. ALEGADO, GMA NewsOctober 9, 2013 7:34pm
The Bangko ng Sentral ng Pilipinas wants to measure the effectiveness of
the Philippine microfinance industry – touted as one of the best in the
world – in alleviating poverty, the central bank chief said.
"We see the value of collecting evidence and data that conclusively
affirms… that access to financial services empowers households to better
manage their resources and improve the quality of their lives," central
bank Governor Amando Tetangco Jr. said in his speech at the Microcredit
Summit Campaign Wednesday.
Microfinacing provides credit to poor individuals wanting to start small
businesses, like mom and pop shops, but who cannot access loans from big
banks because they do not have collateral.
It is largely provided by rural banks and non-government institutions.
Pia Bernadette Roman-Tayag, BSP head for financial inclusion, said on
the sidelines of the summit that the central bank is currently studying
the possibility of a nationwide financial inclusion survey to measure
microfinance sector's effectiveness.
"We want to know, beyond anecdotal evidence, if financial inclusion
initiatives are bearing fruit," said Tayag.
In an interview, Muhammad Yunus, a Nobel laureate for developing the
concepts of microcredit and microfinance, shared that in Bangladesh
effectiveness of microfinance is measured through a set of indicators
that include access to potable drinking water and sanitation as well as
savings for emergencies.
Tetangco, meanwhile,underscored the importance of providing a regulatory
environment to reduce the barriers to the poor's financial access.
He cited regulatory initiatives such as consumer education and employing
rules governing micro-housing and micro-agri loans and the distribution
of microinsurance,
"The result is a regulatory environment which recognizes that the
financial needs of the poor and the unbanked are as varied as the
regular financial consumer," Tetangco said.
Such regulations have made the Economist Intelligence Unit cite the
Philippine microfinance industry as one of the best in the world.
Mila Mercardo-Bunker, chairperson of the Microfinance Council of the
Philippines Inc., said the local microfinance industry remains healthy.
"The repayment rate on microfinance NGOs is at 95 percent, while for
rural banks engaged in microfinance it is at 85 percent," she told GMA
News Online in an interview.
Tetangco said the Philippine microfinance industry services over a
million clients with consolidated outstanding loans of over P8 billion.
"Even better, the combined savings of the banks' microfinance clients
have reached P8.9 billion, an amount surpassing their total loans," he said.
These data, experts said, point out that the poor are good borrowers
despite hurdles they face.
Yunus offered: "Being defaulter is not a problem for me. This does not
imply that a borrower is bad borrower. This only means there is some
provisioning needed.
"We have the ability to end poverty in the world. We just need to come
together and use our creative power. Initiatives form citizens and
social business can make this happen," he noted. — BM, GMA News
