Microfinance institutions seek new market to help small business sector in Davao Region

July 7, 2010 12:21 pm 

DAVAO CITY, July 7 — The microfinance practitioners and other industry stakeholders are working on a new approach on how to help address poverty eradication in the Davao Region and the entire country.

Ruben C. de Lara, president of the Microfinance Council of the Philippines Inc. (MCPI), said their sector is coming up with programs and not just the lending of loans.

Lara said with their institution engaging with financial services in targeting the poor, they are now looking at other pro-poor products and services both financial and non-financial such as on housing and health concerns.

He said this will be discussed in their second gathering in Davao at the Apo View Hotel on July 29-30, where key players from Luzon, Visayas and Mindanao are participating.

With the conference theme "Beyond MicroCredit: A Wholistic Approach to Poverty Eradication", lined up topics will explore new areas of discussions to include among others namely, Client Protection in Microfinance, Beyond MicroCredit — Addressing the Vulnerabilities of the Poor, Barriers and Responses to Bringing Microfinance to Difficult Areas, Mainstreaming Social Performance Management, Beyond Micro-Enterprise Financing: Innovations in Microfinance, and Fostering Collaboration and Partnership Amidst Competition.

He said they are seeking new market to mainstream in the business sector.

"By linking with businesses, it will help create business opportunities for micro entrepreneurs," he said.

He said the MCPI is a national institution composed of 46 Filipino institutions where it strives to attain and maintain certain standards of practice of the welfare of their clients, the sustainability of their operations and ultimately for the eradication of poverty in the Philippines.

Under the MCPI is the Mindanao Microfinance Council which is a network of 41 micro finance institutions (MFIs) based in Mindanao.

Its main objective is to strengthen its member institutions in delivering effective financial and capability development services to the poor.

Meanwhile, Mindanao Microfinance Council (MMC) executive director Jeffrey Ordonez said microfinance finance institutions are present in 3,260 barangays of the island within 673 towns and cities where it has 670,000 active clients.

He said it has a total loan portfolio of P1.03 billion.

Ordonez, however, admitted that they are short of their target of one million for 2010 he they had difficulty in reaching the hinterland barangays and in some areas of the Autonomous Region for Muslim Mindanao (ARMM).

He explained that most of the Mindanao MFIs are medium in size and still struggling in terms of organizational capacities and are not ready to expand even as he said that in some areas are complex situation and requires a lot of transformation.

He cited that in 2008 particularly in Lanao del Sur, they had difficulty finding members who are capable of maintaining microfinance program although he said some MFIs are now present in Basilan, Sulu and Tawi-tawi.

Ordonez said right now, a study is being conducted by the Department of Trade and Industry (DTI) in partnership with Japan International Cooperation Agency (JICA) where microfinance is a component of the study.

"The data will help us improve on what services and institutions are needed and will be basis for expansion in these areas," he said.

Ordonez said in order to penetrate hard reach territories, they need to find existing organizations that have capabilities to provide microfinance which they could partner with.

"When MFIs are not ready to enter these areas, there are options that we could look at if only to serve the poor people in these areas," he said. (PNA)

LDV/DDB/lvp

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