BSP and Microfinance
Microfinance refers to a broad range of financial services such as deposits, loans, payment services, money transfers and insurance to the poor and low income households, generally for their microenterprises and small businesses, to enable them to raise their income levels and improve their living standards.
The typical clients of microfinance are the economically-active, entrepreneurial poor. These include household-based entrepreneurs, farmers, rural artisans, and individuals in the informal sector. These people will be able to sustain and enhance their livelihood if they are provided with effective access to a wide range of financial products and services.
Since 2000, the BSP has established an enabling policy and regulatory environment for sustainable microfinance to flourish in the banking system. The policies provided a framework and opportunity for banks to service the needs of millions of our country’s unbanked yet bankable microentrepreneurs.
Facts regarding Microfinance
A. Understanding Microfinance
- What is microfinance?
- Who are the clients of microfinance?
- How can microfinance assist the poor?
- What are the core principles of microfinance?
- Who are the providers of the microfinancial services?
- What are the different methodologies of microfinance?
B. National Strategy and Framework of Microfinance
- What is the National Strategy for Microfinance?
- What is the National Framework for Microfinance Regulation?
- How can the directed credit programs by the government fit into this microfinance strategy?
- What is the difference with the current microfinance framework from the past failed credit programs?
- What is the difference between private microfinance institutions and other government financing programs? (I.e. Quedancor)
- Is the DTI program, under the BMBE law, in line with the national policy of non-participation of non-financial institutions in credit programs?
C. BSP Initiatives for Microfinance
- What is BSP's policy for advocating microfinance?
- What are the BSP initiatives for microfinance?
- What was the driving force of the BSP to promote microfinance?
- What are the key success indicators of the program?
- Is the focus of the BSP Microfinance Program exclusively for banks?
D. Some Operational Issues for Microfinance in the Banking Sector
- If you are not a microfinance-oriented bank, and have unsecured loans under PhP150,000, is this considered microfinance?
- If you are an existing rural bank, do you have to establish a separate organization to engage in microfinance?
- Once transformed into a microfinance branch, can we use same personnel?
- What is needed to start a microfinance operation in terms of staff, capital, etc?
- What services and incentives are offered to banks engaged in microfinance or want to engage in microfinance?
- How will microfinance operations be supervised by the BSP?
E. Other Issues
- Why is a Credit Bureau important?
- What are the other available resources for training and capacity building?
- What other funding sources can non-bank microfinance institutions tap?