BSP takes steps to push microfinance

Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said yesterday that monetary authorities have taken several steps to promote the country’s microfinance industry.

Tetangco was reacting to a US-based microfinance research group’s observation that the BSP lacks proper regulatory framework to develop the microfinance industry and mobilize savings .

Microfinance Gateway, in a report called Philippine Country-Level Savings assessment, said there are other BSP regulations that hinder small savings mobilization by banks.

Based in Washington, D.C. the Gateway is managed by the Consultative Group to Assist the Poor (CGAP), a consortium of 28 donors who support microfinance.

The BSP chief said they have trained examiners to deal with the banks engaged in microfinancing schemes.

"We have also conducted an intensive information campaign about microfinance," he said.

One issue raised by Gateway is that the cooperative and deposit-taking non-governmental organizations (NGOs) lack effective prudential supervision.

The BSP governor argued that the non-governmental NGOs are not under the supervision of the BSP.

"The BSP’s mandate is to focus on the banking sector. However, its interest in the other sectors such as the NGO and cooperative sector insofar as microfinance is concerned is in relation to the transformation of non-bank microfinance institutions into banks. Other infrastructures needed for microfinance development such as developing uniform set of standards and promotion of best practices for sustainable operations within banks NGOs and cooperatives," the BSP Microfinance handbook said.

With these efforts carried out by the BSP, he said the number of banks engaged in microfinance have gone up to 187 and the loan portfolio has increased to P3.3 billion.