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THE
Development Bank of the Philippines (DBP) served strict
notice to wholesale lenders it deals with that they must
limit their spread on microfinancing of small borrowers
as the bank pays more attention to Mindanao, where the
bulk of its people often do not have access to
affordable credit.
At a
briefing Thursday, DBP president Rey David added an “or
else” warning to those that won’t heed the bank’s
admonition: “Or we don’t deal with them anymore the
following year.” He was referring to their microfinance
institutional partners that include 26 banks and 13
nonbank institutions to whom the DBP typically lends at
3 percent to 4 percent a year.
“If they
do microfinance at an annualized rate of 24 percent,
including their overhead costs, then that’s a start,” he
said. Annual interest of 24 percent means 2 percent a
month for the borrower.
He said
most micro borrowers in
Mindanao are teachers who, for the bank, have a special place in its microfinance
program. The bank has identified 33 unserved areas
there.
David
said the DBP has set aside P821 million of its loan
portfolio specifically for micro lending, and has
released P803 million of that to more than 59,000
borrowers.
To reach
its intended target market in Mindanao, the DBP has
partnered with the Mindanao Lumad and Muslim Development
Center, the local governments of Lanao del Sur and Lanao
del Norte and the Unlad Kabayan Migrant Services
Foundation.
The
bank’s micro as well as its small- and medium-scale
entrepreneur lending program has extended P9.3 billion
in loans at end-2007, the bulk of which, or 74 percent,
was to clients in the countryside.
In
January this year, DBP small-loan activities saw the
release of an additional P690 million. |
