Microfinance lending up 6% to P6.6B
MICROFINANCE lending in the country expanded by roughly P7 billion Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said Wednesday, citing latest data available.
Tetangco said 882,692 borrowers availed themselves of P6.6 billion in microloans approved in 2009. Some cooperative banks, rural banks and thrift banks comprised the financial institutions then with microfinance functions.
“There are now over 200 banks currently providing microfinance services to over 900,000 clients with P6.5 billion in loans outstanding and P3 billion in savings,” the BSP said.
Over 20 BSP circulars have been issued to promote microfinance.
A BSP circular defines microfinance loans as “small loans granted to the basic sectors, as defined in the Social Reform and Poverty Alleviation Act of 1997 (RA 8425) and other loans granted to the poor and low-income households for their microenterprises and small businesses.”
The BSP also said, in Circular No. 272 series of 2001 that microfinance loans “are granted on the basis of the borrowers’ cash flow and are typically unsecured.”
At P150,000 the maximum principal amount of microfinance loans is equivalent to the capitalization ceiling of microenterprises under R.A. 8425.
Microfinance was formally recognized in the country as a banking activity with the passage of the General Banking Law in 2000.
The BSP said that over the past 10 years, “microfinance has become a mainstream activity in the banking sector, and microfinance supervision has been institutionalized.” (GMA News)