Study seeks to improve access to microfinance in Mindanao

DAVAO CITY, Philippines - The Mindanao Microfinance Council would map out areas on the island, with specific focus on the autonomous Muslim region, where small-scale business financing could be promoted in the near term. Jeffrey R. Ordoñez, the council’s executive director, said the baseline study would also determine if microfinance beneficiaries were able to improve their lives. Presently, there’s a large disparity between loan exposure in the Autonomous Region in Muslim Mindanao (ARMM) and the rest of the regions. Total loans disbursed in the autonomous Muslim region amounted to P104.4 million, based on the report of the Microfinance Program Committee. However, ARMM’s total loan disbursement is a pittance compared with the P2.21 billion disbursed in Northern Mindanao, P1.35 billion in Caraga, P1.22 billion in the Davao Region, P1.07 billion in Socsksargen (Region 12), and P740 million in the Zamboanga Peninsula. "We already have member institutions in Basilan and Tawi-Tawi areas and we also have members in Maguindanao," Mr. Ordoñez said. "What we are now trying to do is map out the area to find institutions we can tap and help improve microfinancing access." He said the council needs about P2 million to conduct the comprehensive study, which he hoped would commence this year. As of February 2008, the council has a total of 42 member institutions representing 22 rural banks, nine nongovernment organizations, eight cooperatives and four cooperative banks. Mr. Ordoñez said 98% of 430,000 active microfinance clients all over Mindanao are women. Edgar V. Generoso, president of the People’s Credit and Finance Corp., said the council over the years managed to wean the people away from the "5/6" culture by offering attractive packages for micro-businesses. He said payment has never been the problem for micro-entrepreneurs, as shown by the 98% repayment rate. The lack of conduits, particularly in conflict-afflicted areas, however forced potential clients to turn to loan sharks instead. In order to address that issue, Mr. Generoso said the council adopted a more aggressive strategy, directing their account officers to go directly to market rather than wait for the poor to come to the banks, a strategy that eventually paid off. - Joel B. Escovilla, BusinessWorld