Poor communities to have direct access to micro-financing
By Minerva BC Newman
Cebu City (10 October) -- The Department of Finance (DOF) has submitted to Malacañang recommendations to Executive Order 558 to allow government institutions to conduct microfinance lending, specifically to those poor communities that have no access to micro-financing.
According to DOF Secretary Margarito Teves, the agency proposed to President Gloria Macapagal-Arroyo that micro-finance lending operations should be limited to the Dept. of Social Welfare and Development (DSWD), saying it is the only agency that has the capability to reach out to those clients that have not accessed the micro-finance lending programs of the government financial institutions (GFIs) — mainly those from the poorest communities and municipalities.
In an interview with DSWD-7 regional director Teodulo Romo, he said that the DOF proposal is limited only to those 47 identified municipalities nationwide, where residents have limited or do not have access to micro-finance lending. “As far as region 7 is concerned, we are not included in the 47 municipalities because many of our areas have access to micro-financing. Fortunately, we have no gaps in terms of access to micro-financing,” Romo added.
Romo further said, the DSWD has been managing the micro-financing program for years which, include livelihood capital assistance to poor communities at P5,000.00 per member and P125,000 per association. The amount is actually dependent on the cost of a livelihood project, mostly, income generating.
Another component of DSWD’s micro-financing program is capacity building to groups in the aspects of bookkeeping, livelihood project management, values on savings among others, Romo added.
According to Secretary Teves, his recommendations to EO-558 came mostly from the outputs of the national Summit of Cooperatives held last week. “By identifying the marginal municipalities in urgent need of good financing terms, we expect to ease the concerns of rural banks and private micro-finance lenders that they stand to lose business once EO-558 goes into full swing,” the DOF secretary said.
Finally, the DOF also proposes that an initial P100-million fund be raised to jumpstart the program. Teves also cited the need for Land Bank of the Philippines and Development Bank of the Philippines to get involved in the government’s micro-finance lending program. These institutions would prove invaluable in monitoring the conduct of the program, particularly the collection system to be put in place. (PIA-Cebu) [top]