Microfinance gaining ground
MICROFINANCE continues to grow in the country, the Bangko Sentral ng
Pilipinas (BSP) chief said, as the regulator and the private sector work
to create a viable environment for the industry.
"One of our principal thrusts is to develop a financial system that is
inclusive and reaches out to the unbanked," BSP Governor Amando M.
Tetangco, Jr. said in his speech yesterday during a summit on poverty.
"An inclusive financial system makes for a more stable financial system;
equally important, it enables us to help improve the lives of our
people," he added.
This led the central bank to venture into microfinance -- its flagship
program for poverty alleviation -- in 2000.
"Clearly, there is a need for intervention to accelerate the process of
bringing down the benefits of growth to the grassroots," Mr. Tetangco said.
He noted that more and more Filipinos have kept savings and gained
access to credit through the spread of microfinance.
The combined savings of banks' microfinance clients reached P8.9 billion
as of June, 8.27% higher than the P8.22 billion registered in the first
quarter.
Microfinance loans stood at P8 billion, serving over one million clients.
The level was unchanged from the year before, the BSP chief said,
because microfinance loans are short-term in nature, having a tenor of
up to 90 days.
The savings of clients, he pointed out, surpassed the loans they took
out during the period. "This tells us that microfinance clients have
attained a level of financial independence from gaining access to
microcredit."
He added that the default rate of borrowers remained "low."
At present there are about 186 banks with microfinance operations.
Aside from rural banks, big banks have also entered the lucrative
business of microfinance.
Among them are Rizal Microbank, one of the thrift bank subsidiaries of
Rizal Commercial Banking Corp.; East West Banking Corp., through its
purchase of Mindanao-based Green Bank of Caraga; and Robinsons Bank Corp.
Meanwhile, the central bank has launched a nationwide survey to measure
the impact of microfinance on its clients.
"Aside from anecdotal evidence, it would be ideal to have metrics that
will give us solid data on how we are doing and how we can make things
even better," Mr. Tetangco said.
Pia Roman-Tayag, who heads the central bank's financial inclusion
department, added: "We want evidence-based policy making ... to see if
we are making progress." -- Ann Rozainne R. Gregorio
