Microfinance during challenging times
TEMPO – News in a flash, Dec 2nd, 2013
Three weeks after Yolanda, the typhoon-ravaged areas are gradually getting back on their feet. The focus has shifted from giving relief to survivors to providing them jobs and livelihood opportunities so that they can rebuild their lives.
This is primarily the task of the government, but everyone can still lend a hand. One sector that is expected to play a crucial role in this goal is the microfinance community.
Microfinance institutions (MFIs) such as rural banks, cooperatives, microfinance non-government organizations (NGOs), and lending companies provide financial services and products to households with very limited means and resources.
Through these MFIs, even poor Filipinos can apply for loans to start or sustain small-to-medium enterprises, or open savings accounts to prepare for the future. Having lost most if not all that they owned in the recent disaster, typhoon survivors can very well take advantage of the services of these institutions.
The role of microfinance in challenging times – such as what the country is going through now – was the topic of an event conducted by the Inclusive Finance Advocacy Staff (IFAS) of the Bangko Sentral ng Pilipinas (BSP) last Wednesday (November 27).
Among those who attended the whole-day event were were Sen. Sergio Osmeña IIII, former Philippine Prime Minister Cesar Virata, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco, Jr., Department of Social Welfare and Development (DSWD) Undersecretary Parisya H. Taradji, BSP Monetary Board Members Peter B. Favila and Armando L. Suratos, former BSP Monetary Board Member Cesar A. Buenaventura, and representatives from the banking and microfinance industries, donors, and NGOs.
The program highlighted the importance of multi-stakeholder partnerships in promoting and developing microfinance in the Philippines.
In her presentation on the Sustainable Livelihood Program of the government, DSWD Director Georgina Ann H. Hernandez mentioned how their partners from the private sector and NGOs have helped the agency empower impoverished families through initiatives in values and skills formation, market linkage, credit and savings, and employment facilitation.
Another collaboration cited was the Microfinance Data Sharing System (MIDAS), where MFIs share information and records to address the concern on over-indebtedness among their clients.
During the event, the Bankers Institute of the Philippines (BAIPHIL), Rafael B. Buenaventura Foundation, and the PinoyME Foundation also entered an agreement for a MFI Capability Building Program. Likewise, the DSWD, Alalay Sa Kaunlaran, Inc. (ASKI), and the Center for Community Transformation signed a pact for various partnerships in microfinance.
The program, which also served as a tribute to the late former BSP Governor Rafael “Paeng” B. Buenaventura – a staunch advocate and a pioneer of microfinance in the country – also featured the very first awarding of the Paeng Microfinance Awards.
Five MFIs were honored for their pioneering, innovative, and sustainable practices that have enabled them to uplift the lives of their clients.
ASKI was awarded for its community development program that showed that it is more than just a lending institution. Cantilan Bank, Inc., on the other hand, was praised for its Super Savers’ Club product, which has been an effective tool in promoting financial literacy among children.
The First Agro-Industrial Rural Bank, Inc. (FAIRBank, Inc.), meanwhile, was awarded for its micro insurance product, that has helped families in time of bereavement. The Bank was also applauded for operating immediately after Yolanda, despite the damage in their offices and the homes of its employees.
Kasagana-ka Development Center, Inc. was commended for instilling the importance of health among its clients and training them to become “health cadets.” The Tulay sa Pag-Unlad, Inc., for its part, was honored for helping improve the living conditions of its clients through its Housing Sanitation Water and Electrical Connection Loan.
As a prize, the winners will receive technical assistance from the BAIPHIL, which will guide them in improving and developing their capacity to be commercially sustainable.
It has only been a little over a decade since the BSP was mandated by the law to recognize microfinance as a priority endeavor, but we can already see its impact in poverty alleviation. Indeed, during these challenging times, we need to support the industry even more.
BSP Deputy Governor Nestor A. Espenilla, Jr, said it best in his welcome remarks during the event: “No calamity should discourage the microfinance sector from continuing to provide better, more sustainable services to clients and their families. Typhoon Yolanda highlighted the need for every sector of society – including the microfinance industry – to work closely together for the benefit of our most vulnerable countrymen.”
Note: My book, Central Banking for Every Juan and Maria is now available in main branches of Fully Booked, Power Books, National Book Store, and University of the Philippines Press.
http://www.tempo.com.ph/2013/12/microfinance-during-challenging-times/