|
Friday, September 02, 2005
Micro-finance groups help 83,000 borrowers
Micro-finance institutions in Cebu released some P700 million to its 83,000 active borrowers for the first eight months of this year.
Jose Rico Coligado, People’s Credit and Finance Corp. (PCFC) assistant vice president of the account management group in Visayas, made the disclosure last Wednesday during the Cebu Celebration of the International Year of Micro-credit 2005 at the Cebu City Marriott Hotel.
PCFC is a government-owned micro-finance corporation under the supervision of Land Bank of the Philippines. It finances 16 of the more than 20 micro-finance institutions (MFIs) in Cebu composed of cooperatives, rural banks and non-government organizations.
Poor
According to the report of MFIs as of June this year, Cebu has a 38.8 percent poverty rate. It reported that of the 676,041 households in Cebu, over 260,000 are poor.
Coligado said MFIs want to serve and take away the feeling of hopelessness among the poor.
The micro-finance services sector is targeting those in need but are willing to work hard and cooperate with MFIs to overcome poverty, he added.
“We are accessible because we cover all municipalities in Cebu. That’s why I would say, walang mahirap na walang opportunity sa Cebu. Tamad na lang ang mahirap sa Cebu,” he said. (Even the poor have opportunities. Only the lazy are poor.)
The top livelihood pro-jects prioritized by MFIs are petty or ambulant vending of commodities, such as fish, dry goods, barbecue and vegetables, service shops, food processing, agri-based home projects, handicrafts and home-based cottage industries.
Coligado said a micro-finance loan has a ceiling of P150,000. However, the prevailing micro-financing rate in Cebu is only around P7,000, the average loan per borrower.
He admitted that they occasionally have problems in payment collection. In fact, he said PCFC still has a collectible of P10 million from its borrowers.
“That problem is expected especially when you’re in the business of lending. But overall, the performance of MFIs in Cebu is satisfactory. They have a collection efficiency (on time payment rate) ranging from 97 percent to 100 percent,” he said.
No collateral
Oligado explained that in micro-financing, they do not require collateral for the loans. However, borrowers need to comply with the conditions set by MFIs, like attending the orientation seminar and weekly meetings, since these are the lender’s ways of determining the borrower’s interest.
While there is abundant financial assistance allocated for the poor, Oligado admitted that many borrowers would rather go to “loan sharks” for the “5-6” type of loans despite the higher interest rate.
“(But) in the easy type of loans like 5-6, the interest rate is at 10 to 20 percent per month while in micro-finance, it’s only 2 to 3 percent per month or 24 to 36 percent per annum. That’s a big disparity,” he said. (ALC)
(September 2, 2005 issue)
Write letter to the editor. Click here.
Join the Sun.Star message board. Click here. |
|
[return to top]
[home]
[network page]
|
LOCAL NEWS
BUSINESS
OPINION
SPORTS
LIFESTYLE
FEATURE
SUPERBALITA
WEEKEND
|
