Philippines: Bangko Sentral may Raise Ceiling on Micro-Loans

Jun 2010
Quezon City, Philippines, June, 03 2010 - Noting a rise in the number of micro-finance players, the central bank is considering raising the limit of micro-finance loans to expand its market base and tap unserved sectors.

"We are reviewing our earlier regulations that define microfinance and micro-finance loans. As I mentioned earlier, much has changed in the practice of micro-finance and we want our regulations to be in step with the times," Bangko Sentral ng Pilipinas (BSP) Gov. Amando Tetangco, Jr. told members of the Rural Bankers Association of the Philippines - Microenterprise Access to Banking Services.

The current limit on micro-finance loans is P150,000 but Tetangco said the BSP also wants to service those that fall in the so-called “gray area" of micro-finance loans above the credit ceiling.

“These are the microenterprises that are ready to scale up their operations as small… or even medium… enterprises," he said, adding that micro-finance has expanded from the micro-credit provided by non-government organizations, cooperatives, and some banks.

The 214 banks involved in microfinance have outstanding loans of over P6.4 billion lent to nearly 900,000 micro-entrepreneurs who, in turn, have over P1.5 billion in savings, according to central bank records.

Tetangco also said the central bank consulted lending experts in small- and medium-sized enterprises (SME) to strengthen its supervision of SME-lending technologies.

"We want to have a truly inclusive and empowering financial system that will mainstream the previously unserved or unbanked. Typically, they are more economically vulnerable and stand to benefit the most from information and capacity building that will give them access to financial services," Tetangco said.


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