Echoes From
BY JOHNNY DAYANG
Countryside development
Conventional wisdom dictates the bulk of wealth creation gravitates towards the urbanized centers of the Philippines and hardly any more wealth may be created in the nooks and crannies where the greater Filipino masses, presumably poor, begin building their lives.
Well, conventional wisdom is changing and policy makers and businessmen have made it possible for the countryside and its citizens to compete with their urbanized cousins in capital formation and the pursuit of profits.
This is best shown by the proliferation of microfinance lenders who provide borrowers with loans as small as P5,000 they could not otherwise get from the big commercial banks.
From only a handful of micro loan-oriented banks in 2000, the industry now number more than 200 with loans outstanding in excess of P6-billion benefiting some 900,000 small borrowers.
According to the Microfinance Council of the Philippines, most borrowers are women with no other specialized training save the wisdom they gain from raising children and worrying about where to find the next meal.
And yet, the micro lending industy does not have to worry about repayment issues because its repayment rate is more than 99 percent – far more than the double-digit rate reported by regular commercial banks.
The loans are often used to start enterprises as small as duck or pig raising that three or five years later morph into enterprises requiring loans of P50,000 or larger.
Their initial success is such that the challenge now is how to sustain the growing financing requirement of the micro borrowers.
Policy makers at the Bangko Sentral ng Pilipinas believe money can and continues to be made in the countryside and have crafted more enabling regulations supporting the growth of microfinance in Malinao, Aklan or Macrohon in Southern Leyte.
The growth of micro loans as engines of profits in turn encouraged the BSP to craft regulations for housing microfinance, micro-agri loans and micro insurance early in the industry’s development.
The regulatory changes are proof of the oft cited wisdom about how much money may be made from dirt.
Among miners, for example, they have a saying which says where there is muck there is money.
Regulators and entrepreneurs say the same of microfinance.
BY JOHNNY DAYANG
Countryside development
Conventional wisdom dictates the bulk of wealth creation gravitates towards the urbanized centers of the Philippines and hardly any more wealth may be created in the nooks and crannies where the greater Filipino masses, presumably poor, begin building their lives.
Well, conventional wisdom is changing and policy makers and businessmen have made it possible for the countryside and its citizens to compete with their urbanized cousins in capital formation and the pursuit of profits.
This is best shown by the proliferation of microfinance lenders who provide borrowers with loans as small as P5,000 they could not otherwise get from the big commercial banks.
From only a handful of micro loan-oriented banks in 2000, the industry now number more than 200 with loans outstanding in excess of P6-billion benefiting some 900,000 small borrowers.
According to the Microfinance Council of the Philippines, most borrowers are women with no other specialized training save the wisdom they gain from raising children and worrying about where to find the next meal.
And yet, the micro lending industy does not have to worry about repayment issues because its repayment rate is more than 99 percent – far more than the double-digit rate reported by regular commercial banks.
The loans are often used to start enterprises as small as duck or pig raising that three or five years later morph into enterprises requiring loans of P50,000 or larger.
Their initial success is such that the challenge now is how to sustain the growing financing requirement of the micro borrowers.
Policy makers at the Bangko Sentral ng Pilipinas believe money can and continues to be made in the countryside and have crafted more enabling regulations supporting the growth of microfinance in Malinao, Aklan or Macrohon in Southern Leyte.
The growth of micro loans as engines of profits in turn encouraged the BSP to craft regulations for housing microfinance, micro-agri loans and micro insurance early in the industry’s development.
The regulatory changes are proof of the oft cited wisdom about how much money may be made from dirt.
Among miners, for example, they have a saying which says where there is muck there is money.
Regulators and entrepreneurs say the same of microfinance.
No comments:
Post a Comment