Micro-credit financing bill in House pushed

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Food stalls line a busy street in Villasis, Pangasinan. INQUIRER file photo

MANILA, Philippines — Re-elected Muntinlupa City Representative Rodolfo Biazon on Thursday urged the 16th Congress to fast track the approval of a measure establishing micro-credit financing.

In House Bill 1703, filed at the 15th Congress, its author Biazon said that the Land Bank of the Philippines should provide micro-credit financing to its clients.

The bill seeks to amend Republic Act 3844 or The Code of Agrarian Reform in the Philippines by institutionalizing micro-credit financing as part of Land Bank’s functions.

“As a government universal bank, Land Bank’s vision is to be a dominant financial institution in the countryside leading the nation to economic prosperity,” Biazon said.

HB 1703 will authorize Land Bank to provide private individuals or informal groups of persons with collateral-free loans worth P2,000 to P20,000 to finance small-scale businesses.

Land Bank will be required to allocate 25 percent of its loan portfolio to micro-lending and submit an annual report on its micro-lending operations to Congress for monitoring purposes.

The measure, which the Muntinlupa City legislator seeks to re-file in the 16th Congress, will help micro-entrepreneurs boost economic development in far-flung areas.

“Micro-entrepreneurs thrive in the rural areas like the sari-sari store operators, tricycle drivers, candy vendors and suppliers of daily newspapers,” said the lawmaker.

He said that micro-financing would help those in need to build assets, increase incomes and reduce their vulnerability to economic stress “because, first, they maximize resources abundant in their community. Second, they bank on locally available human resources.”

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  • Ulipur

    MANILA, Philippines – There are 200
    banks and another 2,000 microfinance institutions (MFIs) in the Philippines
    servicing at least seven million microfinance clients, based on a study
    released recently by the Asian Development Bank (ADB).

    The study reported that majority of
    the commercial banks catered indirectly to the microfinance sectors– through
    their socially-oriented foundations — by providing wholesale funds to private
    institutions engaged in retail microfinance services.

    “Some commercial banks, however, opted
    to establish their own rural or thrift banks that are wholly engaged in
    microfinance operations,” it added.

    The Bank of the Philippine Islands
    (BPI) for example established BPI Globe BanKO, a thrift bank utilizing mobile
    phone technology to extend microfinance.

    The Rizal Commercial Banking Corp.
    (RCBC) operated its own microfinance oriented thrift bank, the Rizal Microbank.

    While East West Banking Corp.
    acquired a Mindanao-based rural bank to establish a microfinance
    platform.

    Business ( Article MRec ),
    pagematch: 1, sectionmatch: 1

    The ADB
    reported that the Philippines is considered one of the countries in Asia with a
    relatively developed microfinance industry that provides financial services to
    the low-income sector.

    The
    Economist Intelligence Unit (EIU) recognized the Philippines as one of the
    countries in Asia with “very strong regulatory regimes and good prospects for
    MFIs to enter the sector and perform effectively” for three consecutive years
    (2009-2011). In 2010-2011, the country was adjudged as having the best
    microfinance regulatory framework among 54 countries.

    But the
    report said that the challenges remain enormous.

    The National
    Statistical Coordination Board (NSCB) reported that poverty incidence in the
    Philippines remains one of the highest, next to Cambodia with 30.1 percent and
    Lao People’s Democratic Republic with 27.6 percent in 2010.

    The poor
    still do not have access to various types of financial services.

    The 2011
    World Bank report on the finance sector reported that only about 30 percent of
    Filipinos used formal financial services (lower than the East Asia
    average).

    It said that
    while branches of formal financial institutions have been increasing, access to
    and use of financial services have remained limited for poorer and more rural
    areas.

    This was
    further substantiated by an NSCB report that among the basic sectors,
    fisherfolk had the highest poverty incidence at 41.4 percent in 2009 followed
    by farmers at 35.7 percent.

    “One of the
    perceived barriers is the lack of or inadequate access to financial services of
    the poor, which has been mostly limited by geographic distance, high cost of
    services, inappropriate products, and stringent and tedious documentary
    requirements,” the ADB report add

    Source: PhilStar..Torres

  • Ulipur

    The LBP has long been into microffinancing, not directly to individual borrowers but to institutions or agencies that are engaged in retail financing.

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