Microfinance in the Philippines: An Overview

Microfinance is often defined as the provision of small loans, usually called microcredit, to the underprivileged in sound out to uphold them put up their own businesses and become self-reliant. In the Philippines, where the poverty incidence rate stands at 40%, microfinance has begun to play a major lineament towards helping the poor explore distinct methods of sustainable development. The government has since helped this demote by establishing the Microfinance Unit (MFU) within the National Anti-Poverty Commission (NAPC).There atomic number 18 several major microfinance institutions in the Philippines, but among the largest is that of the Ayala Corporation and the Inter matter take for Rural Reconstruction (IIRR). These institutions work towards reducing poverty through the unalike means of microfinance and sustainable development by conducting financial programs that leave behind realise the poor. Specifically, they provide financial services such as microcredit, microsa vings or microinsurance to the poor. These different forms of microfinance are largely done by the aforementioned institutions with support from the guinea pig government in terms of building up their institutional qualification to support greater scales of financial service.It has been noted that the presence of a subject microfinance strategy, as well as the establishment of various related institutions will work towards improving the Philippine parsimoniousness. As outlined in the national strategy for microfinance, one of the end goals of the multi-faceted program is to achieve a liberalized and market-oriented economy where both the private and government sectors work together in order to sustain the continued development of appropriately-oriented financial and credit policies.Overall, the practice of microfinance in the Philippines has yet to reach its full potential and only time contribute tell if it will be an effective tool as a method of poverty reduction. References Performance Monitoring Report (2005). Microfinance Council of the Philippines, Inc.Retrieved October 22, 2007 from http//www.microfinancecouncil.org/Regulatory fabric for Microfinance in the Philippines (2001). Philippine Department ofFinance. Manila, Philippines DOFRepublic of the Philippines National Strategy for Microfinance. orbiculate DevelopmentResearch Center Governance of Microfinance Institutions. Manila, PhilippinesNational Credit Council of the Philippines