Microfinance group blames shaky peace and order situation for failure to meet target

DAVAO CITY (MindaNews/05 July) – A network of microfinance institutions has blamed the unstable peace and order situation in Mindanao for its failure to meet the target of one million clients in three years as its members could hardly penetrate poverty-stricken areas in the region.

Mindanao Microfinance Council Executive Director Jeffrey Ordoñez. Mindanews Photo by Keith BacongcoJeffrey Ordoñez, executive director of the Mindanao Microfinance Council (MMC), said they have difficulty penetrating areas like Lanao del Sur and Maguindanao to extend financing programs to their prospective clients.

But Ordoñez clarified he does not blame the unstable peace and order situation alone. He also admitted having difficulty in looking for local partners in the area.

“Although we have clients in some areas of Basilan, Sulu and Tawi-tawi. But only a few of them. We used to have a partner in Marawi City but that institution collapsed,” he bared.

He disclosed that since they started the program three years ago MMC already has drawn 670,600 clients across Mindanao.

MMC, a network of 41 microfinance institutions in Mindanao, has set the goal of serving one million active microfinance clients covering all towns and provinces of the island by 2010.

On the other hand, Ordoñez said they will conduct a study in the Autonomous Region in Muslim Mindanao (ARMM) to determine the type of
microfinancing needed in the area.

The study, which is commissioned by the Department of Trade and Industry (DTI), is set to start in August.

He added that part of the study is to find existing microfinance institutions that have the capability to help improve microfinancing access in the region.

The ARMM comprises the provinces of Lanao del Sur, Maguindanao, Sulu and Tawi-tawi and is among the poorest regions in the country.

Ordoñez has earlier disclosed that the ARMM lags behind other regions in terms of the total amount of loans extended. It only availed of P104.4 million based on the report of the Microfinance Program Committee.

Northern Mindanao obtained loans amounting to P2.21 billion, Caraga P1.35 billion, Region 11 P1.22 billion, Region 12 P1.07 billion, and
Region 9, P740 million.

Ruben de Lara, president of the Microfinance Council of the Philippines, said their program is not just simply lending money to their clients. HeMicrofinance Council of the Philippines President Ruben de Lara. Mindanews Photo by Keith Bacongco pointed out that they are advocating a “holistic approach.”

“This includes trainings to develop entrepreneurial skills, value formation, health insurance, housing and education,” he explained, adding, “lending alone is not enough to eradicate poverty.”

He said borrowers can initially borrow between P5,000 and P8,000 with a monthly interest of just one percent.

“When we want to offer our services to the community, we conduct consultations. The clients may group themselves and start a project out of the money we lend to them. There is no collateral for the loan,” he said.

“Of course we do have measures to protect the money from professional borrowers,” he added. (Keith Bacongco/MindaNews)