MANILA, Philippines - Loans extended by banks engaged in microfinance posted a double digit growth of 16 percent in 2010 as financial institutions involved in microfinance continue to move out of urban areas in Luzon to far flung areas in the Visayas and Mindanao, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.
The BSP reported in its latest Status Report on the Financial System that the total loan portfolio of banks engaged in microfinance amounted to P6.9 billion in 2010 from about P6 billion in 2009.
“As of end-year 2010, there were 203 banks engaged in microfinance with a total loan portfolio of P6.9 billion and serving 930,965 microborrowers,” the BSP said.
The BSP added that total savings components to microborrowers reached P3.2 billion.
Monetary authorities said access to financial services could be extended to some remote areas of the archipelago through financial inclusion.
“Efforts to develop a truly inclusive financial system has started to show gainful results with the recent citation from the Economic Intelligence Unit ranking the Philippines together with Cambodia and Pakistan as the best in the world in terms of providing regulatory framework for microfinance,” the BSP said.
The EIU ranked the Philippines as the world’s second best in the microfinance business, and the leader in the Asia Pacific region.
The Philippines outperformed Bolivia slipping to third overall while Peru remained in top spot. On the other hand, Ghana took fourth overall followed by Pakistan, Ecuador, El Salvador, India, Colombia, and Kenya.
The study, entitled the Overall Microfinance Business Environment, reviewed 54 countries and evaluated each country’s microfinance business environment in terms of its regulatory framework, investment climate and level of institutional development.
In terms of regulatory framework, the Philippines, Cambodia and Pakistan shared top position. The three Asian countries were followed by Peru, Bolivia, Ghana, Kenya, Kyrgyz Republic and Uganda.
In terms of institutional development, the Philippines topped all Asian nations at sixth overall behind Bolivia, Ecuador, Peru, El Salvador, and Nicaragua.