Microfinance institutions had over 1M clients—highest ever recorded. These clients had total savings of P8.224B in the same period, significantly higher than the P6.43B end 2012. Outstanding microfinance loans in the same period totaled P8B, lower than the P8.4 billion in outstanding loans end 2012, this was still significantly higher than the P2.6 billion in 2002. Microfinance lenders used to offer below-market interest rates for borrowers. proved ineffective in opening up access to financial services for low-income households and businesses. A new approach was adopted in 2001, where loans were offered at normal rates. But under the new scheme, banks were allowed to subsidize administrative costs, provisions for loan losses and intermediation fees, consistent with the proposition that “what matters most to the poor and underserved segments is access to financial services rather than interest-rate cost.” A microfinance loan averages P25,000 a person, but can reach a low of about P2,000 and a high of P150,000. This approach “enables people to seize economic opportunities,”
Posted on: Wed, 10 Jul 2013 09:00:40 +0000
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