Latest Stories

Draft rules for microfinance NGOs out

Former Cooperative Development Authority Chairperson Lecira “Bing” Juarez talks at the 4th Annual National Microfinance Innovations in Cooperatives Forum at the Sarabia Manor Hotel in Iloilo City, July 8, 2011. The Securities and Exchange Commission has released the draft rules for nongovernment microfinance organizations as part of broader efforts to support businesses of low-income households.

MANILA, Philippines—The Securities and Exchange Commission (SEC) has released the draft rules for nongovernment microfinance organizations as part of broader efforts to support businesses of low-income households.

The rules, posted on the website of the corporate regulator on Wednesday, are also seen to bolster consumer protection efforts and encourage these households to save.

The SEC is seeking comments for the guidelines, which also outline the requirements needed to establish a microfinance-NGO, sets how their funds should be allocated and details the needed documentation, as well as the penalties for violations.

It said covered microfinance organizations may grant loans from P2,000 to a maximum of P150,000 subject to “reasonable and conscionable imposable interest rates and charges.”

The minimum “seed capital” was also set at P150,000 although the SEC has the discretion to require a larger amount.

In terms of how funds will be allocated, the SEC said 70 percent should go to direct lending purposes. Moreover, its total investments in real estate, whether shares of publicly traded firms or “other real estate-based projects,” shall not exceed 25 percent of the organization’s net worth.

Majority of its members must also be Filipino citizens and foreigners will only be allowed to be a member of the said microfinance firm if the individual’s country “accords reciprocal rights to Filipinos.”

For those microfinance firms already operating and currently non-compliant with this rule, the SEC will give them one year to do so after the rules become effective.

Failure to comply means the microfinance organization will be suspended, after due notice and a hearing, for a period of 30 days.

These organizations, which are non-stock and non-profit entities, make use of alternative credit schemes and simplified loan application procedures. The goal is to grant loans to the “poor and low-income households for their microenterprises and small businesses, to enable them to raise their living standards.—Miguel R. Camus

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: draft rules , microfinance NGOs , Philippines , Securities and Exchange Commission (SEC)

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • Kim Henares needs a reprimand, says Cayetano
  • AFP denies hand in disappearance of Tiamzon’s gardener
  • PH gov’t to verify MILF presence in Basilan clash
  • Padaca ‘eager’ to air side on trial over graft, malversation raps
  • DPWH to favor road rehab over preventive maintenance in next 2 years
  • Sports

  • Fielder ends HR drought, Rangers beat Mariners 5-0
  • Power Pinoys salvage 7th place in Asian men’s volley club championship
  • Knicks prevent Nets from clinching fifth seed
  • Arsenal beats West Ham 3-1 in Premier League
  • Memorial service marks Hillsborough anniversary
  • Lifestyle

  • Celebrate Easter Sunday at Buddha-Bar Manila
  • Moriones feast: A slow, steady transformation
  • Weaving ‘palaspas’ a tradition kept alive in Tayabas City
  • Finalists announced for best translated books
  • Summer treat for your aspiring astronomers
  • Entertainment

  • Mommy Dionisia Pacquiao’s greatest hits
  • Deniece Cornejo posts bail—report
  • Miley Cyrus hospitalized, cancels US concert
  • Otaku Summer Jam 2014: Summer’s hottest J-rock/Cosplay event
  • 2NE1 returns to Manila with “All Or Nothing” Tour
  • Business

  • I-Remit teams up with Lakhoo for remittances from Oman
  • Megawide nets P1.4 B in 2013
  • Longer TRO sought on rate hike
  • Make a stylish statement with the all-new Yaris
  • Hearing set in Olarte case
  • Technology

  • Smart phone apps and sites perfect for the Holy Week
  • Tech company: Change passwords or suffer ‘Heartbleed’
  • Filling the digital talent gap
  • SSS to shut down website for Holy Week
  • Another reason to quit social media this Holy Week: your safety
  • Opinion

  • We may never know
  • Couple of things
  • Mommy D’s magic
  • Stop bizarre and bloody Good Friday rituals
  • Holy Week taboos
  • Global Nation

  • 2 PCG men ordered arrested over Balintang Channel shooting
  • US Embassy closed on Holy Thursday, Good Friday
  • Relief worker draws inspiration from helping Yolanda victims
  • Philippines says peace pact should hold despite clashes
  • No travel restrictions to Middle East amid MERS-CoV scare
  • Marketplace