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Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
Microfinance and the Global Financial Crisis
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Microfinance and the Global Financial Crisis

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Mr. Dennis Monong from the People’s Credit and Finance Corporation puts the role microfinance plays in times of uncertainty in perspective. (Jan 29, PACAP Community Development Fourm - Microfinance …

Mr. Dennis Monong from the People’s Credit and Finance Corporation puts the role microfinance plays in times of uncertainty in perspective. (Jan 29, PACAP Community Development Fourm - Microfinance Amidst the Global Financial Crisis)

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  • 1. Microfinance and The Global Financial Crisis By Dennis A. Monong People’s Credit and Finance Corporation
  • 2. Outline
    • PCFC and its Accomplishments
    • Microfinance as an Industry
    • Impact of the Global Financial Crisis on Microfinance
  • 3. People’s Credit & Finance Corporation “ The lead government entity specifically tasked to mobilize resources from both local and international funding sources for microfinance services for the exclusive use of the poor” - Republic Act 8425: Social Reform and Poverty Alleviation Act
  • 4. PCFC MANDATE : to provide the poor with access to credit STRATEGY : Wholesale Lending to accredited microfinance institutions
  • 5. Investment Loans (livelihood) Institutional Loans (MFI strengthening) Poor MFI LOANS Capacity Building Peoples Devt. Trust Fund THE PCFC MICROFINANCE PROGRAM COMPONENTS
  • 6. Targeted Clients
    • The Poor, preferably women (end clients)
    • Microfinance Institutions
    • (conduits-partners)
    Low income households below poverty level
    • Rural Banks and Thrift Banks
    • Coops and Coop Banks
    • Non-Gov’t./Peoples Organizations
  • 7. PCFC’s Accomplishments
  • 8. GEOGRAPHICAL COVERAGE: MFI Visibility Map
    • As of December 2008, PCFC thru its 191 Active MFIs PARTNERS is serving:
    • 82 of 82 Provinces (100%)
    • 131 of 131 cities (100%)
    • 1,369 of 1,497 towns (91%)
    GEOGRAPHICAL COVERAGE LEGEND NGO Cooperative Cooperative Bank Rural Bank Thrift Bank Lending Investors `
  • 9. PCFC PARTNER- MFIs Number of MFIs, By Type As of December 2008
  • 10. End client Outreach July 2004: 1,184,167
  • 11. Loan Volume (‘Php Million’) Cumulative Loan Releases Outstanding Loans
  • 12. Loan Volume (‘Php Million’) loan releases by year
  • 13. Status of Philippine Microfinance Industry
  • 14. 1996 - 2008
    • Poor women: strong borrowers, entrepreneurs and change agents
    • Tremendous growth in outreach
    • MFIs: efficient, responsive delivery of microfinance services
    • Established performance standards and indicators
    • From Microcredit to Microfinance
    • Entry of new private sector players
  • 15. Microfinance: Integrated into Philippine Financial System
    • BSP General Banking Law of 2000
    • NCC – DOF National Strategy for Microfinance
    • Microfinance Council: promotion of best practices
  • 16. Microfinance Players
    • 1996 – CARD, Inc., Negros Women for
    • Tomorrow Foundation, Inc. Tulay Sa Pag-unlad,
    • Inc. (TSPI) , Taytay sa Kauswagan, Inc. (TSKI),
    • etc.
    • 1999 – Rural Banks, Cooperative Rural Banks
    • and Cooperatives
    • 2005 – Private Commercial Banks
  • 17. Sources of data: MFPC Secretariat. Over all Accomplishments on Microfinance and SEA –K As of October 2008
  • 18. ACTIVE MICROFINANCE CLIENTS, BY SECTOR
  • 19. ACTIVE MICROFINANCE CLIENTS, BY LIVELIHOOD ACTIVITY
  • 20. LOAN RELEASES, BY SECTOR
  • 21. LOAN RELEASES, BY LIVELIHOOD ACTIVITY
  • 22. Impact of the Global Financial Crisis on Microfinance
  • 23.
    • Current Scenario: The Global Financial Crisis
    • Global Financial markets has deteriorated in recent months
    • Financial Sector deleveraging has continued
    • Market confidence has fallen
    • The Philippine economy is affected but remains resilient
  • 24.
    • Microfinance prior to Global Financial Crisis
    • Availability of funds was not considered to be a concern
    • Microfinance sector was so attractive for the investors
    • In the Philippines, microfinance got the attention of the commercial investors
  • 25.
    • Effects of Global Financial Crisis on Microfinance
    • Microfinance Sector - decrease available capital
    • - Will have a negative domino effect
    • - less adversely affected
    • Wholesale MFIs – more cautious, lower appetite and might
    • increase interest rates
    • Retail MFIs – big players will adjust to economic changes
    • small MFIs might experience difficulty
    • Client – lower loan demand for some borrowers,
    • Increase in food and fuel prices might lead to
    • borrowers default and dropout
  • 26. Loan Volume (‘Php Million’) PCFC loan releases by year
  • 27. Sources of data: MFPC Secretariat. Over all Accomplishments on Microfinance and SEA –K As of October 2008
  • 28.
    • Is it worth investing in MFI at this time?
    • Certainly, we must invest during this time of
    • crisis. Providing firm commitment to the poor is
    • crucial.
    • More confidence and support are needed by the
    • sector during this time.
    • There is an opportunity to invest even more
    • (number of clients would increase)
  • 29.
    • How should the MFI face the challenge?
    • With confidence
    • With more discipline and prudence
    • With creativity and passion
  • 30.
    • How to minimize the impact on MFI?
    • Focus on portfolio quality
    • Enhance risk management processes
    • Diversify and expand all sources of financing
  • 31. Thank you and Have a Good Day….

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