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Home » News & Opinion » Philippines has Best Microfinance Environment: Economist Intelligence Unit

Philippines has Best Microfinance Environment: Economist Intelligence Unit
Agcaoili, L.

The Economist Intelligence Unit (EIU), the business information arm of The Economist Group, has declared the Philippines as the best in the world in terms of its microfinance environment. The study conducted by the EIU looked at 55 countries and measured each country’s state of regulatory framework, investment climate and institutional development.

The General Banking Law, in 2000, mandated Bangko Sentral ng Pilipinas (BSP) to recognize microfinance as a legitimate banking activity and to set the rules and regulations for its practice within the banking sector. "In the past nine years, the BSP issued 18 circulars and undertaken major activities and initiatives for microfinance. In recent years, the success in microfinance development has paved the way for further efforts to build an inclusive financial system," the BSP said.

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21 Feb 2010
Is Microfinance micro-enterprise credit, stil?

The author of the article seems to define Microfinance as loans to micro-entrepreneurs. Savings are mentioned as a sort of "by-product". It explains that the author, and indeed maybe The Economist although I didn't read its study, do not really reflect what poor people need in financial services to get out of poverty, and what Microfinance institutions need to become sustainable and have sustained growth. The poor need to manage money better, the little they depend on for their survival in an insecure and vulnerable environment. Having secure debt obligations in such an environment is a burden, a liability. Furthermore, for MFIs to become sustainable they need the (voluntary) deposits of the clients they intend to serve. Deposits provide the most reliable funds on the market and they provide the most reliable and cheapest form of data on the client.

peter van dijk Indonesia

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Posted: 19 Feb 2010
Source: The Philippine Star
Originally Published: 17 Feb 2010