DoF wants gov't microfinance operations limited to DSWD
Quezon City (9 October) -- The Department of Finance (DOF) has submitted to Malacanang its own recommendations that is expected to fine-tune Executive Order No. 558, which allows government institutions to conduct direct microfinance lending.
According to Finance Secretary Margarito Teves, the agency has proposed to President Gloria Macapagal-Arroyo that microfinance lending operations should be limited to the Department of Social Welfare and Development (DSWD), barring all other line agencies.
Teves said that the DSWD is the only agency that has the capability to reach out to the unserved clients of government financial institutions--mainly, those from the poorest communities and municipalities.
In an interview at the sidelines of the National Summit of Cooperatives held last week, Teves added that another key recommendation of the DOF is for the DSWD to lead the selection of 47 municipalities nationwide, where residents have limited or no access to microfinance lending.
By identifying the marginal municipalities in urgent need of good financing terms, Teves expects to ease the concern of rural banks and private microfinance lenders that they stand to lose business once EO No. 558 goes into full swing.
The DOF also proposed that an initial P100-million fund be raised to jumpstart the program.
He also cited the need for the LandBank of the Philippines and the Development Bank of the Philippines to be involved in the government's microfinance lending program. Teves said that the institutions would prove invaluable in monitoring the conduct of the program, particularly the collection system to be put in place. (PIA) [top]