DSWD was tasked by President Arroyo to be the lead agency in providing micro-finance to 47 municipalities identified by the People's Credit and Finance Corporation as currently unserved areas. These unserved areas are municipalities where there are no identified and available participating financial institutions (PFIs) providing micro-credit such as rural banks, cooperatives and non-governmental organizations.
DSWD Secretary Esperanza Cabral instructed the DSWD Field Offices to immediately conduct socio-economic profiling in the said 47 municipalities to determine those who can avail of the micro-credit. Under the DSWD micro-finance program, a minimum of P5,000 and a maximum of P50,000 loan assistance can be provided to the borrower to start a business.
Cabral said that the government shall not be extending grants or subsidized loans under this program. Rather, it will charge the prevailing interest rate of 18% per year.
The livelihood support program to be provided by the DSWD shall include social preparation and capacity-building activities to assist the targeted clientele to access financial assistance from PFIs at the soonest possible time. Secretary Cabral has directed Assistant Secretary Rinand Maquiling to simplify loan documentation and processes to ensure timely approval of proposals and disbursement of proceeds. President Arroyo has also tasked the Land Bank of the Philippines and the Development Bank of the Philippines to complement the livelihood support program of the DSWD by identifying and providing support to potential PFIs who will be willing to provide the necessary financial services in the unserved areas and to whom the DSWD can eventually turn over its micro-credit operations.
Cabral added that those who do not qualify for the micro-finance program can be assisted under the DSWD Self-Employment Assistance (SEA-K) Program which is being implemented in partnership with local government units to enhance the socio-economic skills of poor families through the organization of community-based associations for entrepreneurial development. - Jasmin R. Uy/MEEV