Arroyo Highlights Importance Of Microfinance In Creating Jobs
Monday, September 19, 2005
Philippine President Gloria Macapagal-Arroyo underscored Monday the importance of microfinance in generating jobs and spurring the growth of entrepreneurship nationwide.
In her keynote address before the Stakeholders Forum on Microfinance held at Philippine Presidential Palace Malacanang’s Heroes Hall, the President said one of her administrations 10-point agenda is to develop three million entrepreneurs in 2004-20l0 through microfinance and medium enterprise loans.
The President has also directed the Peoples Credit and Finance Corporation, which is under the Department of Trade and Industry (DTI), to collate qualified microfinance “conduits” to make it easy for entrepreneurs interested in microfinance to avail themselves of the services of these conduits.
“I have directed the Peoples Credit and Finance Corporation to create a directory of microfinance conduits in each town and barangay of the country. This will serve as a guide for our countrymen interested with microfinance and how to go about availing themselves of the services of these conduits,” the President said.
The President also witnessed the awarding of checks amounting to P73 million (US$1.3 million) representing microfinance loan releases to the different small business and cooperative beneficiaries in the country chosen by various Government Financial Institutions (GFI).
She said that from July 2001 to May 2005, the government has provided some P20.79 billion microcredits to 2.17 million borrowers nationwide.
The forum and check-awarding ceremony was held in line with the declaration of 2005 as the Year of Microcredit by the United Nations (UN) and the Presidents issuance of Proclamation No. 719 declaring 2005 as the Year of Microfinance in the Philippines.
With its theme: Harnessing Microfinance for Jobs Generation and Entrepreneurial Growth, the forum hopes to increase peoples awareness of available and forthcoming microfinance services, raise pertinent concerns, suggest actions to deal with issues, and promote stronger partnerships among major stakeholders.
Microfinance is the provision of a broad range of financial services such as deposits, loans, payment services, money transfers and insurance products to poor and low-income households and their micro-enterprises.
The governments microfinance program involves the extension of credit to poor and low-income households for as low as P 2,000 non-collateralized loans to as much as P150,000 at competitive interest rates and the conduct of intensive social preparation and training of borrowers.
The government is the single biggest provider of microfinance through wholesale lending of Government Financial Institutions (GFIs) to accredited Microfinance Institutions (MFIs) such as banks, NGOs and cooperatives.
These MFIs, in turn, re-lend the loans from the GFIs to poor but economically active entrepreneurs who have a stable economic activity and who shall be able to sustain and enhance this activity.
On a sustained basis, microfinance helps to generate jobs and income, build viable businesses, reduce vulnerability to external shocks, empower clients and helps improve the quality of lives of those who avail of the service.
Among those who attended the event with the President were Executive Secretary Eduardo Ermita, Presidential Management Staff Chief Rigoberto Tiglao and the different officers and staff of GFIs, private commercial banks, international and multilateral funding institutions, retails fund providers, credit unions, PCFC conduits, and non-government organizations.