The Philippines

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

In the Philippines -- where 56 percent of households live under the international poverty line -- local NGOs, rural banks and credit cooperatives have grown to reach 3 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 sometimes 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 the of the MFIs have been able to take advantage of this opportunity. 

Since 2003, Grameen Foundation 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. 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 helping local MFIs and other NGOs use the Progress out of Poverty Index^TM (PPI^TM), a poverty scorecard, to measure if they're reaching the poorest households and to track changes in poverty rates over time.  Through the PPI, we hope to promote greater accountability, helping MFIs to show that they're meeting their 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 robust SPM strategies, implement concrete SPM initiatives, 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.

Local Partners in the Fight against Poverty in the Philippines
Networks

• Microfinance Council of the Philippines, Inc.

Collaborators

• Oikocredit
• Planet Rating

Local Microfinance Institutions

• Center for Agricultural and Rural Development (CARD)
• Tulay Sa Pag-Ulad Incoporated (TSPI)
• Negros Women for Tomorrow Foundation (NWTF)