This paper reviews the microfinance sector in the Philippines.
The paper states that
* There is a huge market for microfinance services in the Philippines.
* Currently, there are three major providers of microfinance services: non-government organizations (NGOs), rural banks and cooperatives.
* The increase in competition in the microfinance industry is evident from the rising incidences of credit ‘pollution’ among microfinance institution (MFI) clients.
* Microfinance in the Philippines faces challenges in the areas of:
o Establishment of a credit information bureau,
o Establishment of good governance practices,
o Product development skills of MFIs,
o Increasing capacity of MFIs,
o Regulation of NGOs engaged in microfinance ,
o Setting performance standards,
o Lowering the cost of microfinance delivery.
The paper describes:
* Regulations and government initiatives for microfinance in the Philippines and lists the following key elements in the national strategy for microfinance:
o Development of innovative financial products,
o Capacity building of MFIs,
o Formulation of an effective supervisory and regulatory framework for MFIs.
* The practices of NGOs, rural banks and cooperatives.
* Innovations and their role in lowering the cost of microfinance.
The paper concludes with information about microfinance providers, finding and supporting organizations, support in terms of policy and networks, technical assistance and training institutions.
