When micro means big (First of Two Parts)-A A +A
Sunday, January 5, 2014
DURING the holiday season, some of us might have used the phrase “big things come in small packages” to describe the gifts we gave to or received from friends and loved ones. Indeed, there are times when things that seem little and invaluable can create an impact greater than what their appearance would tell.
Such is the case of microfinance, deemed by the National Government as one of the key strategies in solving poverty in the Philippines.
Microfinance offers financial services that are within the means of the low-income sector. Requiring simpler documentation, microfinance encourages and enables people to start businesses or to save for the future.
Although it would not bring instant wealth or security to poor families, it provides the necessary push and support for them to develop discipline and confidence towards attaining financial independence. It’s definitely a big help for those starting at the bottom and with almost nothing.
Ester Lumbo from Negros Occidental, one of the winners at the 2010 Citi Microentrepreneur of the Year Awards, would surely agree. With the help of P3,000 she loaned from a microfinance institution, she was able to grow her bag and handicrafts business. Her products are being sold now in as far as Cebu and even Hawaii.
Based on the report on the state of financial inclusion in the Philippines by the Inclusive Finance Advocacy Staff (IFAS) of the Bangko Sentral ng Pilipinas (BSP), more and more Filipinos are going to microfinance to better their lives.
In fact, there was a 191 percent growth among microfinance borrowers from 2002 to 2012. In 2012, 1.37 million Filipinos were given a chance to start or grow their small-to-medium enterprises using about P8.4 billion worth of microfinance loans. They also began to save more as the 64 percent increase in microfinance savings from 2011 to 2012 would show.
(To be continued next week)
Note: My book, Central Banking for Every Juan and Maria is now available in main branches of Fully Booked, Power Books, National Book Store, and University of the Philippines Press.