Microfinance loans surged 333 percent to P11.3 billion in 2015 from P2.6 billion in 2002, Bangko Sentral ng Pilipinas said Tuesday.
“Industry figures mark our progress. In December 2002, for instance, there were 390,635 microfinance borrowers from 119 banks. By Dec. 31, 2015, the number of banks providing microfinance loans had increased by nearly 43 percent to 170 while the number of borrowers had increased by 277 percent to roughly 1.47 million,” Bangko Sentral Governor Amando Tetangco Jr. said at the launch of the Citi Microentrepreneurship Awards.
“If we base it on their savings, we can say that microfinance has improved the financial standing of these microentrepreneurs. Together, they have accumulated savings of about P4.5 billion as of December 2015. We have no comparative data for 2002 deposits; compared however to the deposits of as December 2011, this represents a 22 percent growth,” Tetangco said.
He said microfinance could raise the quality of living of many Filipinos.
The Go Negosyo Act and Negosyo Centers provide support for micro, small and medium enterprises such as facilitation of business registration and training in finance and marketing. Negosyo Centers can also link MSMEs to value chains to enable them to access secured and sustainable markets and keep them more viable.
Tetangco said the Philippines had one of the world’s best environments for promoting the quality of life of people through sustained development of the microfinance sector.
The Economic Intelligence Unit’s 2015 Global Microscope on Financial Inclusion ranked the Philippines first in Asia and the third in the world in terms of regulatory environment for financial inclusion.
Tetangco said challenges remained that continuously hindered the success of microentrepreneurs.
One is the limited capacity of microenterprises when it comes to financial recording and documentation which makes them susceptible to poor accounting and planning, he said.
“At the BSP, we recognize that informality and lack of capacity remain major hurdles that impede the growth of microenterprises. As a response, the BSP has issued guidelines on sound credit risk management practices [Circular 855] that provide an empowering approach to support small businesses,” he said.
Microfinance loans and other credit accommodations not exceeding P3 million are exempted from the submission of financial documents such as income tax returns and other supporting financial statements.
