Creating an Enabling Policy Environment for Microfinance
This presentation reviews the demand of microfinance by the micro-enterprise sector in the Philippines. It reveals that the bottom 30% of poor Filipinos manage at least two micro-enterprise activities; of these, less than a fourth have access to credit.The presentation discusses:
- Government initiatives in microfinance and their limited successes.
- Barriers to microfinance, that include,
- Perception that poor are high risk;
- High transaction costs;
- Regulatory barriers;
- Poor's feeling of intimidation by formal institutions;
- Lack of infrastructure and physical access to formal institutions.
- Laws and issuances supporting microfinance.
- Government's national strategy for microfinance.
Further, it reviews the activities and involvement in microfinance of Bangko Sentral ng Pilipinas' (BSP), which has a 3-pronged approach:
- Creation of an enabling policy and regulatory environment;
- Increase in the capacity and skills of the BSP and the banking sector on microfinance;
- Promotion and advocacy.
Finally, the presentation discusses BSP's support to microfinance through:
- The establishment of microfinance-oriented banks;
- Policy and regulatory initiatives;
- Introduction of performance standards for institutions engaged in microfinance;
- Training and capacity building efforts;
- Promotion and advocacy campaigns and initiatives.