People’s Credit and Finance Corp to issue P1-B notes for microfinancing program

The state-run People’s Credit and Finance Corp. (PCFC) will issue up to P1-billion worth of five-year corporate notes to finance its microfinancing program.

The notes issuance is being arranged by First Metro Investment Corp., the investment house of banking giant Metropolitan Bank & Trust Co.

PCFC is a government-owned microfinance corporation under the supervision of the Land Bank of the Philippines. It finances 16 of more than 20 microfinance institutions in Cebu composed of cooperatives, rural banks and non-government organizations.

PCFC’s microfinance program is a component of President Arroyo’s 10-point agenda that includes the creation of 10 million jobs for Filipinos by 2010 through developing new lands for agribusiness and extending loans to small business.

Currently, PCFC, through its 200 active conduits (program partners) nationwide, has around 1.6 million active microfinance clients.

The government has designated PCFC as the lead coordinating agency in the microfinance program to improve the delivery of funds to up-and-coming entrepreneurs.

The maximum loan under the program is P150,000 but small and medium enterprises could get more.

Government financial institutions do not lend directly to clients, but course funds through microfinance institutions such as rural banks, non-governmental institutions and cooperatives.

PCFC has been expanding its loan portfolio and outreach to the marginalized sector of the country since 1996.

As part of the government’s program to helping the poor, PCFC is targeting to reach out to about three million end-borrowers by 2007, focusing on increased penetration and saturation of areas through its existing microfinance intermediaries.

The government provided some P21 billion in micro-credit to 2.17 million borrowers nationwide between July 2001 and May 2004.