By Dennis D. Estopace
Reporter
ACTIVISTS among the upper- and middle-income families of the country launched on Monday an attempt to consolidate the reach and powers of small lenders —called microfinance institutions—in a bid to raise five million Filipinos from poverty via a P5-billion capital in the next five years.
The 5-5-5 goal of the consortium that calls itself the PinoyME Movement —ME standing for microenterprise—was formulated by the who’s who in the country’s business and business’s foundations, led by former President Corazon Cojuangco Aquino.
These companies included Bank of the Philippine Islands, United Coconut Planters Bank, Negros Navigation Inc., PLDT Co. and Phinma, while major charitable groups included Ayala Foundation Inc., Metrobank Foundation Inc. and the Philippine Business for Social Progress.
The consortium brought into the network of these companies and groups eight MFIs that Ayala Foundation’s Victoria Garchitorena said currently has two million clients.
Garchitorena said in her prepared speech at the consortium’s first anniversary celebration that these MFIs were “personally handpicked” by Aquino and whose clients are expected to be more than three million by 2010.
The move to consolidate the works of these MFIs, according to Aquino, was in recognition of their success “in uplifting lives in depressed communities and in proving that the poor are truly credit-worthy.”
“Hence, the consortium is focusing on ways by which to enhance the MFI’s effectiveness and to achieve the scale necessary to have a palpable impact on reducing poverty,” Aquino said.
According to a brochure, the group would help create a broad middle class as the “key to equitable economy and stable democracy.” Notably, Aquino was swept into power in 1986 by an antidictatorship movement supported by middle-income families.
The brochure added it believes that “as more and more microenterprises grow into SMEs, there emerges a strong base for economic growth.”
Aquino noted that the P5 billion her group would try to raise “is the minimum we would need to augment the current equity and deposit base of the MFIs.”
This year, Garchitorena said, they aim to raise P1 billion, to be led and managed by the PBSP.
Speaking for PBSP, Phinma chief executive Ramon del Rosario said that this money called a social investment fund would be lent wholesale to MFIs.
The eight MFIs include the foundation of Lopez family-owned ABS-CBN Corp., the Luzon-centered Center for Agriculture and Rural Development (CARD) and the Visayas-based Taytay sa Kauswagan Inc. (TSKI).
“Funds will be sourced from social investors either through donations or low-yielding investments,” del Rosario said.
He said “anyone can be a social investor” by contributing to the fund from “P5,000 (for a microfinance loan size availed of by one member of a poor family); P150,000 for a group of 30 borrowers in a community; P2.5 million for a branch in an urban/semi-urban area (managing centers with approximately 1,000 to 1,500 borrowers); and, P5 million for a branch in a hard-to-reach area.”
Del Rosario added that they would ensure the MFIs tapping this lending facility would relend to families in “hard-to-reach areas where there is little or no microcredit facility available, except for loan sharks.”
Likewise, del Rosario said that the MFIs could also borrow from this fund to lend to “higher value adding enterprises and not the traditional and retail enterprises.”
“By applying these two criteria, it is believed that the poverty reduction impact of microfinance can be better realized,” he added.
Borrowers could tap into the fund of up to P150,000, according to del Rosario. On the other hand, enterprises wanting to borrow above that and up to P10 million could access the PBSP’s lending facility, del Rosario said.
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