Bangko Sentral mulls raising microfinance loan ceiling

November 25, 2011 5:54pm

The ceiling on microfinance loans — at P150,000 since 2003 — could soon be raised to give entrepreneurs better access to credit, the Bangko Sentral ng Pilipinas (BSP) said on Friday.

"Although monitoring of microfinance loan is quite strict, a microfinance loan does not require collateral. [Increasing the ceiling] will have an advantage to low-income earners who want to engage in business," BSP Deputy Gov. Nestor Espenilla explained.

Last year, P13 billion in microfinance loans were issued to about 2.3 million borrowers. The size of the average loan per microentrepreneur was lower at P5,650.

“Beyond the wholesale and high-end retail markets, the growth of microfinance and non-traditional delivery channels is something we are most proud of. The banking system is much more inclusive today with almost 980,000 [979,353] microfinance borrowers at a portfolio of P7.3 billion covering over 200 [202] banking institutions,” BSP Gov. Amando Tetangco Jr. said in a recent convention.

The BSP issued Circular No. 409, series of 2003 to set the ceiling, while a series of other circulars diversified the type of microfinance loans to include housing, agriculture, and microinsurance purposes.

In particular, BSP Circular 678 widened the scope of microfinance by allowing qualified loans up to P150,000 for home improvement and up to P300,000 for lot acquisition and house construction.

Another issuance, Circular No. 680, allowed authorized banks to offer micro-agri loans to small farmers. —ELR/VS, GMA News


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