Microfinance program gets ICC nod

Small-time entrepreneurs in the country’s five poorest regions can now expect a healthier business environment with the approval of the Rural Microenterprise Promotion Program (RuMEPP) by the Investment Coordination Committee (ICC) Cabinet Committee. The program is expected to stimulate or expand the development of microenterprises primarily in the 19 provinces of the poorest regions in the country: Cordillera Administrative Region (CAR), Bicol, Eastern Visayas, Socksargen and Caraga.

"This will be done through a combination of financial and technical resources that reinforce existing institutions operating in the sector," declared Cleofe Pastrana, Assistant Director of the National Economic and Development Authority’s (NEDA) Social Development Staff. She said the program is expected to advance the govern-ment’s goal of generating 10 million jobs by 2009, as identified in the 2005-2010 Medium-Term Philippine Development Program (MTPDP) and President Arroyo’s 10-point agenda.

According to Pastrana, microenterprises comprise 91 percent of the total business establishments in the country in 2003. In terms of population, 3.7 million households (or 63 percent of the bottom 40 percent in the economic strata) are engaged in entrepreneurial activities.

"Hence, developing and expanding the microenterprise sector is expected to provide greater job opportunities compared to large enterprises," she said. According to Pastrana, the $28.3789 million (roughly P1.5 billion) program has three components: microenterprise financing for rural development (MEFRD), microenterprise promotion and development (MEPD), and institutional development, program management and policy coordination. The MEFRD component focuses on providing wholesale loans to microfinance institutions (MFIs), giving priority to rural, cooperative and thrift banks, which will re-lend to micro-entrepreneurs.