BSP: Average micro loans doubled in 2006

By Jun Vallecera

Reporter

 

THE banks, notably thrift institutions and microfinance-oriented lenders, have embraced the idea of extending loans to small borrowers in increasing numbers in 2006, more than doubling the average loan extended to P11,600 per borrower, the Bangko Sentral ng Pilipinas said on Wednesday.          

This compares with micro loans the year before averaging only P5,000 per client; and boosting BSP optimism that significantly more people this year will benefit from the program started only six years earlier.        

“Latest data indicate there are more than 200 banks providing microfinance services to 630,000 microborrowers with total loan portfolio of P3.7 billion,” Tetangco told reporters.            

The increase is indicative of the heightening interest in a sector that Nobel Prize winner Mohammad Yunnus proved worth engaging in without losing the money of profit-conscious shareholders.    

Tetangco noted that less than 50 micro lenders were in existence before his immediate predecessor and mentor, Rafael Buenaventura, formally started the program in 2000.            

The general attitude at that time was that the poor, whose sole collateral is the strength of their character, were an unbankable lot that only credit cooperatives and nongovernment organizations touch.         

Attitudes have changed and according to Tetangco, the micro-lenders have become key units in their advocacy for alleviating poverty in the country. 

The microfinance unit of the BSP, headed by Pia Bernadette Roman, said while banks account for some P3.7 billion worth of microloans outstanding at the moment, the aggregate size was around double if the loans granted by credit cooperatives and NGOs were included.               

“More than P7 billion worth of microloans are outstanding at the moment,” Roman said. 

Former BSP governor Buenaventura in 2000 started the microfinance program as an advocacy program, believing in the creditworthiness of the Filipino poor who often fall victim to so-called five-six loan sharks for lack of access to the formal credit channels.        

Tetangco, Buenaventura’s ward, now heaps praise on the banks “for [their] growing support for the microfinance industry, our special advocacy for alleviating poverty in the country.”

http://www.businessmirror.com.ph/0119&202007/headlines04.html