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The Philippines

The microfinance industry’s presence in the Philippines has been characterized by innovation, dynamism and continued growth. 

  • Fifty-six percent of households in the Philippines live under the international poverty line

Woman selling food. Over the years, local NGOs, rural banks and credit cooperatives have grown to reach three million borrowers across the nation.  At the same time, the industry has introduced critical innovations in the fields of micro-insurance, wholesale lending, mobile banking and social performance management.  Microfinance operations in many urban and rural areas in Luzon have led to increased competition among microfinance institutions (MFIs), yet Mindanao and the Cordilleras still do not have access to financial services.  As the larger MFIs develop more cost-efficient lending operations, they start moving away from the poorest borrowers, who are just starting their businesses and need smaller loans.  At the same time, although more and more commercial banks are starting to lend to MFIs, only a handful of them have been able to take advantage of this opportunity. 

Since 2003, GF has been supporting the growth of some of the largest and most progressive MFIs in the Philippines, helping them become leaders in social performance, capital markets access, and information technology.  Beginning in 2009, Grameen Foundation will work with a larger group of MFIs and other stakeholders to bring the benefits of microfinance and technology to the rural areas where most of the three million poor and still unserved families reside. 

In the coming years, Grameen Foundation will employ a combination of catalytic capital, systems, automation, and social performance metrics to help MFIs in the Philippines more effectively pursue financial empowerment and sustainable growth.  At the same time, Grameen Foundation will work with other microfinance intermediaries to build a better infrastructure for collective action and encourage greater accountability, efficiency and transparency across the industry:

  • Social Performance Management (SPM) We are assisting local MFIs and other NGOs to use the Progress out of Poverty IndexTM (PPITM), a poverty scorecard, to reach the poorest households and track changes in poverty rates over time.  Through the PPI, we hope to promote greater accountability in achieving an MFI’s social mission.  At the same time, we are working with the Microfinance Council of the Philippines (MCPI) and Oikocredit to create a peer-learning community where local MFIs can develop a robust SPM strategy, implement a concrete SPM initiative, and share the critical lessons of implementation with each other.
  • Capital Access  Grameen Foundation is providing leading MFIs with credit enhancements and advisory services to better access commercial capital and to continue introducing groundbreaking innovations, such as the region’s first ever issuance of a five-year, $10 million corporate note for the country’s largest MFI.  At the same time, Grameen Foundation is providing direct lending capital and technical assistance to emerging MFIs to finance their expansion into underserved areas, and help them prepare for commercial investments.  In partnership with Planet Rating, Grameen Foundation is also conducting a series of workshops to bring MFIs and wholesale lenders together, and promote more strategic practices in the area of capitalization.
  • Technology Readiness and Automation We are establishing a hosting and technology consulting service that will help MFIs automate, manage business information, and achieve scale in a controlled and cost-effective way.  With the pioneering Mifos platform, our open source management information system (MIS) designed specifically for microfinance operations, Grameen Foundation brings the resources of the mainstream software industry to serve the expanding needs of the microfinance sector.  At the same time, we are establishing a global consortium of leading MFIs to develop a complete technology solution and demonstrate the benefits of automation

 

Local Partners in the Fight against Poverty in the Philippines

Networks

 

Collaborators

 

Local Microfinance Institutions