It is important to have a policy and regulatory environment favorable to the MF industry in order to have sustainable MFIs that would continue to provide the much needed financial services to poor households.
RA 8425 defines microfinance as a credit and savings mobilization program exclusively for the poor to improve the asset base of households and expand access to savings of the poor. It involves the use of viable alternative credit schemes and savings programs including the extension of small loans, simplified loan application procedures, collateral-free arrangements, alternative loan repayments and minimum requirements for savings.
Development grants for capacity-building of microfinance institutions and beneficiaries shall be funded out of the earnings or income of the PDTF. The Corpus of the PDTF is the amount allotted by the RA 8425 in the total amount of Four Billion and Five Hundred Million Pesos (Php 4,500,000,000) over a span of ten years, but remains to be adequately funded with only Php 100 million in trust at present. The disbursable portion shall consist primarily of the earnings of the PDTF and may include additional amounts expressly donated, contributed or granted by local or foreign sources.
Pursuing social and financial returns Microfinance as Anti-Poverty Strategy
Consultancy and training services for microfinance institutions, LGUs and their beneficiaries on the establishment of the necessary support services, social and financial preparation, preparation of plans and programs including fund sourcing and assistance, establishment of credit and savings M&E mechanisms;
Scholarships or training grants for microfinance staff and officers and selected beneficiaries;
Community organizing for microfinance, livelihood and microenterprise training services;
Livelihood/microenterprise project/program feasibility studies and researches;
FOCUS GROUPS Wholesale lending to wholesalers Wholesale lending to retailers Land Bank of the Philippines (LBP) Wholesale lending to retailers Quedan and Rural Credit Guarantee Corporation (QUEDANCOR) Wholesale lending to retailers Capacity-building loans People’s Credit and Finance Corporation (PCFC) PROGRAM INSTITUTION
Wholesale lending to retailers Business development loans Capacity-building loans Development Bank of the Philippines (DBP)
Agrarian Reform Communities (ARCs)
FOCUS GROUPS Wholesale lending to retailers Small Business Guarantee and Finance Corporation (SBGFC) Wholesale lending to retailers Capacity-building loans National Livelihood Support Fund (NLSF) PROGRAM INSTITUTION
Reaping the fruits: Significant Developments in MF
Overall Microfinance Program Status
P 49.22 B P 59.02 B Amount of Loan Releases SONA 2 (Beginning July 2004) Cumulative from SONA 1 (Beginning July 2001) 648,005 (33%) New Jobs Generated from Microfinance (SONA 2) 1,993,606 3,433,049 Active Microfinance Clients SONA 2 (Beginning July 2004) Cumulative from SONA 1 (Beginning July 2001) 1,410 2,188 Number of MFIs Including branches 80 of 80 117 of 117 1,453 of 1,500 (97%) Geographical Coverage Provinces Cities Towns As of September 2006