NAPC and Microfinance Andrea S. Alforte Microfinance Unit, NAPC Secretariat
PRESENTATION OUTLINE <ul><li>Basic Microfinance Concepts </li></ul><ul><li>Microfinance and Poverty Reduction </li></ul><u...
Basic Microfinance Concepts
Paradigms on credit <ul><li>MODERN </li></ul><ul><li>Asset </li></ul><ul><li>poor are bankable </li></ul><ul><li>collater...
RA 8425 defines Microfinance <ul><li>Purpose </li></ul><ul><li>Improve HH’s asset base </li></ul><ul><li>expand access to...
Core Principles <ul><li>Low-income households need sustained access to financial services. </li></ul><ul><li>The poor have...
Who are the MF Players? MICROFINANCE CLIENTS (3.1 million as of March 2006) MICROFINANCE INSTITUTIONS Rural/Thrift/MF B...
Target Clients of MF <ul><li>Economically active and entrepreneurial low-income households </li></ul><ul><li>Those who hav...
Types of Projects Financed <ul><li>Consumer trading/marketing </li></ul><ul><li>Home-based micro-enterprises </li></ul><ul...
Microfinance Clients Situation Microfinance Clients Situation Classification of the poor as target for microfinance servic...
How can MF Assist the Poor? <ul><li>If provided on a sustainable basis, microfinance can: </li></ul><ul><ul><li>Build viab...
Microfinance and Poverty Reduction
Gov’t Poverty Reduction Program <ul><li>Asset Reform </li></ul><ul><li>Human Development Services </li></ul><ul><li>Employ...
MF in Poverty Reduction Strategy <ul><li>Increased livelihood and employment opportunities </li></ul><ul><li>Strengthening...
NAPC Mandates in MF
NAPC Institutional Mandates <ul><li>Coordinate with different national and local government bodies and private sector to a...
NAPC’s Thrusts/Functions on MF <ul><li>Development of a policy environment, especially in the area of savings generation <...
Policy Environment for MF <ul><li>RA 8425 – directs creation of NAPC, organization of PDTF and PCFC privatization and capi...
NAPC’s Thrusts/Functions on MF <ul><li>Development of a policy environment, especially in the area of savings generation <...
Credit Policy Principles <ul><li>Greater role of the private sector (MFI) in financial services provision </li></ul><ul><l...
NAPC’s Thrusts/Functions on MF <ul><li>Development of a policy environment, especially in the area of savings generation <...
GFI Credit Windows for MF <ul><li>MF Banks </li></ul><ul><li>MF-oriented banks </li></ul><ul><li>MF NGOs </li></ul><ul><li...
<ul><li>Farmer-based/owned coops and organizations </li></ul><ul><li>Rural Finance Institutions (RFIs) </li></ul><ul><li>M...
NAPC’s Thrusts/Functions on MF <ul><li>Development of a policy environment, especially in the area of savings generation <...
ADB Technical Assistance <ul><li>Conduct nationwide survey of 53 MFIs and 424 MFI clients in frontier areas </li></ul><ul>...
MF Sector Strengthening Project <ul><li>Provision of technical assistance to MFIs on ASA methodology </li></ul><ul><li>Tra...
NAPC Executive Mandate on MF <ul><li>Monitor the July 2001 & 2004 SONA target on MF: </li></ul><ul><ul><li>make MF as a c...
 
 
 
MF/ME Database <ul><li>Local policies </li></ul><ul><li>Map of areas with MF services </li></ul><ul><li>Directory of Micro...
NAPC’s Mandate on PDTF <ul><li>Source funds for the establishment of/and augmentation of PDTF </li></ul><ul><li>Recommend ...
People’s Dev’t Trust Fund (PDTF) Php 4.5 Billion Fund (accumulated in 10 yrs) only the interest earnings can be used as g...
PDTF <ul><li>PDTF ExeCom </li></ul><ul><li>Identify strategic activities to augment PDTF </li></ul><ul><li>Recommend to PC...
PDTF <ul><li>Strategic Activities for PDTF Financing: </li></ul><ul><li>Donor’s forum </li></ul><ul><li>Floatation of bond...
Other Activities <ul><li>Conducted Regional Training on Gender Issues in Microfinance (Luzon, Visayas, Mindanao) </li></ul...
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NAPC and Microfinance

Published on: Mar 3, 2016
Source: www.slideshare.net


Transcripts - NAPC and Microfinance

  • 1. NAPC and Microfinance Andrea S. Alforte Microfinance Unit, NAPC Secretariat
  • 2. PRESENTATION OUTLINE <ul><li>Basic Microfinance Concepts </li></ul><ul><li>Microfinance and Poverty Reduction </li></ul><ul><li>NAPC Mandates in Microfinance </li></ul>
  • 3. Basic Microfinance Concepts
  • 4. Paradigms on credit <ul><li>MODERN </li></ul><ul><li>Asset </li></ul><ul><li>poor are bankable </li></ul><ul><li>collateral free </li></ul><ul><li>banking at doorsteps </li></ul><ul><li>demand driven </li></ul>TRADITIONAL <ul><li>liability </li></ul><ul><li>poor can’t pay </li></ul><ul><li>collateral req’t </li></ul><ul><li>bank as only source </li></ul><ul><li>of formal credit </li></ul><ul><li>subsidized credit/ </li></ul><ul><li>supply driven </li></ul>
  • 5. RA 8425 defines Microfinance <ul><li>Purpose </li></ul><ul><li>Improve HH’s asset base </li></ul><ul><li>expand access to savings </li></ul>Credit - savings mobilization program exclusive for the poor Characteristics - small loan - simple application - collateral free - alternative loan repayments - minimum savings
  • 6. Core Principles <ul><li>Low-income households need sustained access to financial services. </li></ul><ul><li>The poor have the capacity to repay their loans and to save. </li></ul><ul><li>Microfinance institutions can be operationally and financially self-sufficient. </li></ul>
  • 7. Who are the MF Players? MICROFINANCE CLIENTS (3.1 million as of March 2006) MICROFINANCE INSTITUTIONS Rural/Thrift/MF Banks, NGOs, Cooperatives (about 1,817 MFIs) Capacity Building Support Agencies/ Institutions Policy/Regulatory/ Supervisory Agencies GFIs/ Wholesalers DONOR COMMUNITY Capacity Building Support Agencies/ Institutions
  • 8. Target Clients of MF <ul><li>Economically active and entrepreneurial low-income households </li></ul><ul><li>Those who have a stable economic activity and will be able to sustain and enhance that activity </li></ul>
  • 9. Types of Projects Financed <ul><li>Consumer trading/marketing </li></ul><ul><li>Home-based micro-enterprises </li></ul><ul><li>Food processing/services </li></ul><ul><li>Agri-based </li></ul>
  • 10. Microfinance Clients Situation Microfinance Clients Situation Classification of the poor as target for microfinance services ( Adapted from the JBIC Study on Sustainable MF for Poverty Reduction in the Philippines, Sept. 2004)
  • 11. How can MF Assist the Poor? <ul><li>If provided on a sustainable basis, microfinance can: </li></ul><ul><ul><li>Build viable businesses, </li></ul></ul><ul><ul><li>Help increase income, </li></ul></ul><ul><ul><li>Build assets, future investments and savings, </li></ul></ul><ul><ul><li>Generate employment, </li></ul></ul><ul><ul><li>Reduce vulnerability to external shocks </li></ul></ul>
  • 12. Microfinance and Poverty Reduction
  • 13. Gov’t Poverty Reduction Program <ul><li>Asset Reform </li></ul><ul><li>Human Development Services </li></ul><ul><li>Employment and Livelihood </li></ul><ul><li>Security and Social Protection </li></ul><ul><li>Participation in Governance </li></ul>MICROFINANCE/ MICRO-ENTERPRISE
  • 14. MF in Poverty Reduction Strategy <ul><li>Increased livelihood and employment opportunities </li></ul><ul><li>Strengthening the capacity of marginalized groups to engage in productive enterprises </li></ul>
  • 15. NAPC Mandates in MF
  • 16. NAPC Institutional Mandates <ul><li>Coordinate with different national and local government bodies and private sector to assure full implementation of social reform and poverty alleviation programs </li></ul><ul><li>Oversee, monitor and recommend policies to ensure effective formulation, implementation and evaluation of policies, programs and resource allocation </li></ul><ul><li>Ensure meaningful participation of the basic sectors </li></ul><ul><li>Develop and promote microfinance </li></ul>
  • 17. NAPC’s Thrusts/Functions on MF <ul><li>Development of a policy environment, especially in the area of savings generation </li></ul><ul><li>Rationalization of existing government programs for credit/guarantee </li></ul><ul><li>Utilization of existing government financial entities for provision of MF products and services for the poor </li></ul><ul><li>Promotion of mechanisms necessary for implementation of MF services, including indigenous MF practices </li></ul>
  • 18. Policy Environment for MF <ul><li>RA 8425 – directs creation of NAPC, organization of PDTF and PCFC privatization and capitalization (1998) </li></ul><ul><li>General Banking Act of 2000 – Section 13-(i) and 13- (iv) encourages application for microfinance-oriented banks </li></ul><ul><li>RA 9178 promoting establishment of Barangay Micro Business Enterprises (Nov 2002) </li></ul><ul><li>Administrative Order 86 – organizes National Credit Council to rationalize directed credit programs of government (1996) </li></ul><ul><li>Executive Order 138 – directs non-GFIs to stop retailing credit (1998) </li></ul><ul><li>Executive Order 110 – Directing the PCFC as the Administrator of the People’s Development Trust Fund (2002) </li></ul><ul><li>New regulations for credit cooperatives (2002) </li></ul>
  • 19. NAPC’s Thrusts/Functions on MF <ul><li>Development of a policy environment, especially in the area of savings generation </li></ul><ul><li>Rationalization of existing government programs for credit/guarantee </li></ul><ul><li>Utilization of existing government financial entities for provision of MF products and services for the poor </li></ul><ul><li>Promotion of mechanisms necessary for implementation of MF services, including indigenous MF practices </li></ul>
  • 20. Credit Policy Principles <ul><li>Greater role of the private sector (MFI) in financial services provision </li></ul><ul><li>Enabling policy environment to facilitate increased participation of MFI </li></ul><ul><li>Market-oriented financial and credit policies (interest on loans and deposits) </li></ul><ul><li>Non participation of the gov’t in the implementation of credit and guarantee programs </li></ul>viable/sustainable private (micro) financial market
  • 21. NAPC’s Thrusts/Functions on MF <ul><li>Development of a policy environment, especially in the area of savings generation </li></ul><ul><li>Rationalization of existing government programs for credit/guarantee </li></ul><ul><li>Utilization of existing government financial entities for provision of MF products and services for the poor </li></ul><ul><li>Promotion of mechanisms necessary for implementation of MF services, including indigenous MF practices </li></ul>
  • 22. GFI Credit Windows for MF <ul><li>MF Banks </li></ul><ul><li>MF-oriented banks </li></ul><ul><li>MF NGOs </li></ul><ul><li>Savings & Credit Coops </li></ul><ul><li>Cooperatives </li></ul><ul><li>Countryside Financial Institutions (CFIs) </li></ul><ul><li>MF NGOs </li></ul><ul><li>Countryside Lending Conduits (CLC) </li></ul><ul><li>Agri-Cooperatives </li></ul><ul><li>Accredited MFIs </li></ul>TARGET AVAILERS <ul><li>Agri-fishery/forestry projects </li></ul><ul><li>Rural/urban microentrepreneurs </li></ul>FOCUS GROUPS <ul><li>Wholesale lending to retailers </li></ul><ul><li>Business development loans </li></ul><ul><li>Capacity-building loans </li></ul>Development Bank of the Philippines (DBP) <ul><li>Wholesale lending to wholesalers </li></ul><ul><li>Wholesale lending to retailers </li></ul>Land Bank of the Philippines (LBP) <ul><li>Wholesale lending to retailers </li></ul>Quedan and Rural Credit Guarantee Corporation (QUEDANCOR)  Wholesale lending to retailers  Capacity-building loans People’s Credit and Finance Corporation (PCFC) PROGRAM INSTITUTION
  • 23. <ul><li>Farmer-based/owned coops and organizations </li></ul><ul><li>Rural Finance Institutions (RFIs) </li></ul><ul><li>MFIs </li></ul><ul><li>Coops </li></ul><ul><li>NGOs </li></ul><ul><li>Banks </li></ul>TARGET AVAILERS <ul><li>Coconut farmers </li></ul><ul><li>Manufacturing </li></ul><ul><li>Processing </li></ul><ul><li>Trading </li></ul><ul><li>Services </li></ul><ul><li>Agrarian Reform Communities (ARCs) </li></ul>FOCUS GROUPS <ul><li>Wholesale lending to retailers </li></ul>UCPB-CIIF Finance and Development Corporation (UCFDC) <ul><li>Wholesale lending to retailers </li></ul>Small Business Guarantee and Finance Corporation (SBGFC)  Wholesale lending to retailers  Capacity-building loans National Livelihood Support Fund (NLSF) PROGRAM INSTITUTION
  • 24. NAPC’s Thrusts/Functions on MF <ul><li>Development of a policy environment, especially in the area of savings generation </li></ul><ul><li>Rationalization of existing government programs for credit/guarantee </li></ul><ul><li>Utilization of existing government financial entities for provision of MF products and services for the poor </li></ul><ul><li>Promotion of mechanisms necessary for implementation of MF services, including indigenous MF practices </li></ul>
  • 25. ADB Technical Assistance <ul><li>Conduct nationwide survey of 53 MFIs and 424 MFI clients in frontier areas </li></ul><ul><li>3 FGDs with 39 BS Representatives </li></ul><ul><li>On-site Training and Mentoring of 29 MFI units in frontier areas </li></ul><ul><li>20 Microfinance education seminars in frontier areas (3,300+ participants) </li></ul>
  • 26. MF Sector Strengthening Project <ul><li>Provision of technical assistance to MFIs on ASA methodology </li></ul><ul><li>Trained local practitioner-trainers on ASA </li></ul><ul><li>Documentation of successful MF practices </li></ul><ul><li>Development of ASA Instructional Manual </li></ul>
  • 27. NAPC Executive Mandate on MF <ul><li>Monitor the July 2001 & 2004 SONA target on MF: </li></ul><ul><ul><li>make MF as a cornerstone in the fight against poverty </li></ul></ul><ul><ul><li>300k new women borrowers per year (2001-2004); 3 million clients (2004-2010) </li></ul></ul><ul><li>E.O. No. 110 (PCFC as PDTF Adm.) </li></ul><ul><ul><li>reiteration of Section 10 of RA on NAPC’s function over PDTF </li></ul></ul><ul><li>NAPC as the main policy body over microfinance (6th NAPC EB -2/36/03) </li></ul>
  • 31. MF/ME Database <ul><li>Local policies </li></ul><ul><li>Map of areas with MF services </li></ul><ul><li>Directory of Microfinance Institutions </li></ul><ul><li>Credit Windows of Wholesale Microfinance Providers </li></ul>
  • 32. NAPC’s Mandate on PDTF <ul><li>Source funds for the establishment of/and augmentation of PDTF </li></ul><ul><li>Recommend the accreditation of organizations/institutions acting as resource partners for institutional development </li></ul><ul><li>Ensure that validation/monitoring activities are conducted for PDTF-funded projects </li></ul><ul><li>Promote research and development work on livelihood & MF technology, publications/communications programs for poor beneficiaries </li></ul>
  • 33. People’s Dev’t Trust Fund (PDTF) Php 4.5 Billion Fund (accumulated in 10 yrs) only the interest earnings can be used as grant Capacity building/ institutional strengthening of MFIs
  • 34. PDTF <ul><li>PDTF ExeCom </li></ul><ul><li>Identify strategic activities to augment PDTF </li></ul><ul><li>Recommend to PCFC projects, organizations and institutions for PDTF accreditation </li></ul>
  • 35. PDTF <ul><li>Strategic Activities for PDTF Financing: </li></ul><ul><li>Donor’s forum </li></ul><ul><li>Floatation of bonds </li></ul><ul><li>Tapping of government agencies with funds for capacity-building to contribute to PDTF </li></ul><ul><li>Proposal to ACEF for Php250 million contribution to PDTF for SFF </li></ul>
  • 36. Other Activities <ul><li>Conducted Regional Training on Gender Issues in Microfinance (Luzon, Visayas, Mindanao) </li></ul><ul><li>Membership to Microfinance Program Committee </li></ul>

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