Thursday, October 05, 2006 Arroyo assesses directive on gov't role in micro-lending
PRESIDENT Gloria Macapagal-Arroyo is reviewing a proposed policy that would clarify the extent of Executive Order (EO) 558, which allows government agencies that are not financial institutions to engage in micro-lending.
Finance Secretary Margarito Teves said he gave the memorandum containing the clarificatory EO last Monday afternoon.
Teves said the amendment would allow the social welfare department and participating financial institutions to give direct microfinance lending. He said it will be market-based with an 18 to 24 percent per annum rate as against 34 to 40 percent used by most microfinance institutions.
He said the social welfare office was chosen because it has a larger network than rural banks and "the President used to be there."
Teves also said EO 558, if taken literally, would have "created a widespread difference because it would have led to other corporations getting involved into this type of activity."
This time, he said economic managers were consulted on the proposed amendatory EO.
He said they didn't discuss anymore the fact that Teves was not consulted before the issuance of EO 558. (JMR/Sunnex)
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