Business World
Finance
Posted on 08:56 PM, December 28, 2010
THE NUMBER of active microfinance clients in the Philippines increased between 2006 and 2008 following the implementation of a project by the Asian Development Bank (ADB), a report released yesterday by the multilateral lending agency showed.
THE ASIAN DEVELOPMENT BANK released a report yesterday indicating that the number of microfinance clients in the Philippines increased between 2006 to 2008. Microfinance is considered one of the tools that help combat poverty.
THE ASIAN DEVELOPMENT BANK released a report yesterday indicating that the number of microfinance clients in the Philippines increased between 2006 to 2008. Microfinance is considered one of the tools that help combat poverty.
The ADB reported that microfinance clients increased by 129.17% to 5.5 million in December 2008, from 2.4 million in December 2006.
ADB said its $150-million Microfinance Development Program (MDP), approved on Nov. 22, 2005, helped create a “sound and market-oriented microfinance sector development path” for the Philippines.
The project had the goal of helping the Philippine government in addressing weaknesses in the microfinance sector and help poor Filipinos access quality financial services.“The objective of the MDP was to improve household incomes, reduce poverty and reduce the vulnerability of the poor,” ADB said in the report.
Microfinance is the provision of financial services to low-income clients who traditionally lack access to typical banking and related services.
Microfinance is also the idea that low-income individuals are capable of lifting themselves out of poverty if given access to financial services.
The National Credit Council, under the Finance department, served as the borrower and executing agency for the loan.
Aside from increasing the number of Filipinos who access microfinance services, the bank said MDP also helped in creating a total of 2.6 million jobs during the period of its implementation, along with the increase in the amount of microfinance and in the number of loan releases.
The ADB report added that performance standards of microfinance institutions in terms of portfolio quality, efficiency, sustainability outreach ratings and continued monitoring were also achieved, along with easy financial transactions through electronic banking and appropriate rural saving schemes that increased the clients’ savings mobilization.
“The MDP enhanced the enabling and regulatory environment as the Bangko Sentral ng Pilipinas formulated rules and regulations to promote microfinance operations by banks, allowing microfinance-oriented banks to open branches anywhere in the country, and promoting electronic banking with consumer protection, particularly for savings mobilization,” ADB said.
It added that the Securities and Exchange Commission managed to comply with the program’s required policy action of compelling microfinance-oriented non-government organizations to be transparent and observe full disclosure in their operations.
Assessing the MDP overall, the multilateral financial institution said it was “successful” in achieving its objectives with its high efficiency and likely sustainability.
Finance officials were not immediately available for comment as of yesterday. -- Jo Javan A. Cerda
