Wednesday, October 26, 2005

In one of our media fora in Club 888 at Marco Polo Hotel many weeks ago, I confronted representatives of the regional office of the Department of Trade and Industry (DTI) by saying that our government is so involved in small and medium enterprises to the extent that less attention and funding are given to micro businesses. I’ve pointed out to them that if we are really serious in addressing our widespread poverty, it is most advisable that our government should equally attend to the needs and problems of micro businesses.

The DTI representatives tried hard to justify our government’s lack of action towards our micro businesses instead of admitting the inadequacy and ask for viable suggestions to improve government’s services to this effect.

That’s why I’m happy to hear that a national forum was held recently on this concern and that microfinance services from the government are now forthcoming.

Of course, the greatest need of micro businesses is microfinancing. As defined in the editorial, “Microfinance is the provision of broad range of financial services such as deposits, loans, payment services, money transfers and insurance products to poor and low-income households and micro-enterprises.” Our government organized the People’s Credit and Finance Corporation (PCFC) under the DTI, to “collates qualified microfinance conduits to make it easy for entrepreneurs to avail themselves of these services.”

Lately also we learned that our government, being the number one provider of microfinance through its government microfinance institutions (GFIs) now accredited microfinance institutions (MFIs) like banks, non-governmental organizations, and cooperatives. Of course, these MFIs, re-lend the loans they got from the GFIs, in turn, to economically active poor entrepreneurs with stable and sustainable microbusinesses. President Gloria, we learned, has included in their proposed 2006 national budge substantial amount for microfinancing. Good.

Participating GFIs are: 1) Development Bank of the Philippines; 2) Land Bank of the Philippines; 3) National Livelihood Support Fund; 4) Small Business Corporation; 5) Philippine Export-Import Credit Agency; and 6) Quedan and Rural Credit Guarantee Corporation. It would be interesting to know their performances these past few years on microfinance.

Yes, microfinance can greatly assist on a sustained way the generation of jobs and income, creation of viable enterprises, empowerment of poor entrepreneurs and upliftment of the standard of living of those who avail of the services. Per info, the recent forum on microfinance “enabled the participating government institutions and organizations to recommit themselves to further support microenterprises that have become effective in reducing poverty levels, especially in the countryside.”

Some of our suggestions to our government to this effect are: 1) Focus its microfinancing in poor provinces or municipalities; 2) Make an inventory of successful MFIs and give priority to these lending institutions; and 3) Launch massive information/educational drive on the importance of microenterprises and microfinance in fighting widespread poverty in the country.

In our latest book “Get Rich, Stay Rich – The Christina Way” (now available at Pauline Bookstore, Bolton Street, Davao City), I devoted several pages on microfinance aware of its dire importance in the alleviation of poverty in our country. I wrote about the “Grameen Bank” founded in 1974 by Dr. Mohammad Yumus, a professor of Economics at Chittagong University in Bangladehs. “Grameen” by the way means villages. This bank engages in microfinance servicing poor entrepreneurs with small-interest loans.

In the book, I likewise mentioned success stories on microfinance in our region such as that of: 1) credit and loan cooperatives supervised by Finance Organizations Achieving Certified Credit Union Standing (Foccus); 2) Micro Enterprise Bank–a thrift bank–operating now in Davao City and Tagum City; and 3) “Bangko sa Kabus” Development Project (BankDep) of “SPES PAUPERUM FOUNDATION, INC. (SPFI) of the Diocese of Tagum. These microfinancing institutions, undoubtedly, are effective in fighting the excessive “5-6” lenders which proliferates in our public markets and elsewhere in the Philippines, not to mention these institutions’ vital role in our war against poverty.

Finally, let me call the attention of the poor Filipinos who will have the opportunity to avail of microfinance loans. Please have the much-needed discipline and financial intelligence in using their loans. Please work hard and use wisely these loans to improve the quality of your lives.

Source: Sun Star (link opens in a new window)