BSP calls for increased lending to micro enterprises
The Bangko Sentral ng Pilipinas is pushing for increased lending to more micro enterprises in the country.
BSP Governor Amando Tetangco Jr. said there had been a significant improvement in the accessibility of credit to micro enterprises in the country, as proven by the substantial amount of loans extended to and the rising number of borrowers from the sector.
Tetangco, however, acknowledged that there was still much room for growth. While micro loans have become accessible in several rural areas, the same is not true for many of the remote areas in the country.
Tetangco said strategies to reach these remote areas should be pursued aggressively.
Outstanding loans to micro enterprises have amounted to P6.5 billion, covering 900,000 borrowers. Micro enterprises also have P3 billion in combined bank savings.
There are 1,100 cooperatives and non-government organizations engaged in lending and other services to micro businesses.
“Micro finance can effectively be implemented within a formal and prudently regulated environment … small clients can become good clients given suitable products and services,” Tetangco said in a speech delivered during the launch of the 2011 Microentrepreneur of the Year (MOTY) Awards last Friday.
MOTY, which is now in its ninth year, recognizes small borrowers who were able to improve their lives and those of their families, and have served as models to other low-income earners, through hard work and their entrepreneurial skills.
MOTY is funded by Citi Foundation and is conducted in partnership with the BSP, Citi Philippines and the Microfinance Council of the Philippines Inc. (MCPI).
MCPI president Mila Mercado-Bunker said that to promote entrepreneurship among people in remote areas in the country, the non-government organization had started conducting training programs in selected areas.
She said educating people to become entrepreneurs was the first step to encourage them to engage in micro businesses. Completing the first step is necessary to spur demand for micro credit and to ensure they become responsible borrowers, Bunker added.
While the government and MCPI hope to see more credit extended to people from the hard-to-reach areas, Bunker said it was also important that the borrowers were trained to become responsible in meeting their financial obligations.
