Business & Economy

Microfinance loans, savings breach P8-Billion mark

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The total value of microfinance loans and savings have breached the P8-billion mark as more lending institutions see the importance of addressing the needs of the country’s micro, small and medium enterprises (MSMEs).


Amando Tetangco, Bangko Sentral ng Pilipinas Governor, yesterday said that as of end-March 2013, there were 186 banks with microfinance operations reaching out to more than 1 million clients.


Their combined savings have reached P8.2 billion, higher than the P8 billion they have borrowed.  In 2012, the savings component of microfinance loans totaled only P6.4 billion while total loans reached P8.4 billion.

“This is the first time that total microfinance loan portfolio is exceeded by the savings component.  This suggests that while microfinance clients take out loans, saving is sustained. For microentrepreneurs, savings help them survive through emergencies or take advantage of a business opportunity,” Tetangco yesterday said at the launch of the 2013 Citi Microentrepreneurship Awards (CMA).

Tetangco said that the development of the Philippine microfinance industry “has been phenomenal.”

“Ten years ago, microfinance was limited to microcredit provided by leading NGOs, cooperatives and a handful of banks. Since then, there has been a significant increase and diversification of microfinance players, products and services,as well as  delivery channels,” Tetangco said.

He added that the BSP provides leadership in the development of the microfinance sector through appropriate policies, regulations and programs.

“So far so good.  In fact, the Philippines has been cited to have the best regulatory framework for the development of microfinance for four consecutive years now,” Tetangco said.

But Tetangco believes more could be done.

An earlier survey on Financial Access done by the World Bank estimated that only around 20 percent Philippine-based MSMEs are being service by financial institutions.

This pales in comparison to other countries in the region like Malaysia where this figure is around 60 percent.

In the Philippines, MSMEs account for 99.6 percent of our total enterprises, employs 61 percent of our total employed population, and contributes 32 percent to the GDP.

Now on its 11th year, the annual CMA awards program continues to be successful in increasing awareness for microfinance and providing incentives to microentrepreneurs in the country.

Funded by Citi Foundation, this nationwide search is a partnership among BSP, Citi Philippines and the Microfinance Council of the Philippines, Inc. (MCPI).

“These individuals are true models of tenacity and a rich source of inspiring life-long lessons for everyone. To us at the Bangko Sentral ng Pilipinas, the saga of our microentrepreneurs’ success is a constant reminder of the empowering benefits of gaining access to financial services,” said Tetangco.

CMA was introduced in 2002 as Citi celebrated its centennial in the Philippines and in Asia. Since then, it has been adopted as a global program and introduced in 34 other countries.  Over the last decade, it has recognized 86 Filipinos, a number of whom have grown their businesses significantly in terms of profits and assets.

“Citi is privileged to partner with BSP and MCPI in drawing the spotlight to microfinance and entrepreneurship as sustainable solutions to poverty,” said Bitara Sianturi. 

“Each year, we celebrate the success of our individual winners for their economic heroism that play a big role in the development of their communities and the larger society,” Sianturi said.

In 2012, over 100 nominations were received from 28 microfinance institutions, rural banks and cooperatives from Luzon, Visayas and Mindanao, and the organizers expect to get the same support if not more for this year.

Of the nominations received, four winners will be chosen. One will be named the Citi Microentrepreneur of the Year, while three others will be hailed as regional winners for Luzon, Visayas, and Mindanao.

The awards are open to microenterprises with assets worth P300,000 to P3 million. There will also be a special award for enterprises with assets below P300,000 and another special award on innovation. A special award for sustainability is being introduced this year, which will recognize a past CMA winner with a proven track record of business growth.

The winner of the Citi Microentrepreneur of the Year Award will receive P200,000 while the three regional awardees and special awardees will each get P100,000. The loan officers of each awardee are also entitled to a cash incentive of P10,000. (Malaya)

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