Sunday, December 8, 2013


As a part of the cooperative movement, I am sad to observe that the cumulative performance since 2000 of the Bangko Sentral ng Pilipinas (BSP) in promoting microfinance through the formal banking system is quite modest, to put it mildly.

Comparatively, I can hazard a guess that the Cooperative Development Authority (CDA) might had done better, as far as cooperatives doing microfinance.

We will recall that in 2000, the BSP was mandated under the General Banking Law to help push the development of microfinance in the country.

But as of end June 2013, BSP reported that it now has 186 banks with microfinance operations in the country, serving over one million clients.  These clients have a combined outstanding loans of P8-billion, and have consolidated bank deposits of P8.9-billion.

For easy reckoning, let's get the annual average of this cumulative performance.  Let's just use ten years.  This will give us an annual number of clients of 100,000; average annual loans of P800-million; and average deposits of P890-million.  

For all the resources of the BSP, I dare say this is very modest, to say it mildly.

By comparison, the CDA, given its puny, err, modest resources, was able to register during the period January 1- December 31, 2012 1,609 new cooperatives. 

 According to CDA records, these new cooperatives have total of 184,267 members; with authorized capital of P3.35-billion; of which P1.29-billion was subscribed; and of which P0.814-billion was paid.

Quite comparable performance for CDA.  But are we comparing apples and oranges here?  I don't think so.  Microfinance loans have now been raised to P300,000 from P150,000.  And we did not even have data on savings and other deposits of the members of cooperatives.  We only have data on paid share capital.

There are also microfinance NGOs (Non-government organizations, foundations, etc.) which are registered by the Securities and Exchange Commission.  What are their performance compared with those with BSP-regulated banks doing microfinance.  I am sure microfinance NGOs are doing much better that BSP's banks.

But one thing BSP may have a little edge over CDA.  BSP had provided the enabling policy and regulatory environment for microfinance, which has been deemed as the best in the world.  

Included in BSP's 3-pronged approach to increase the capacity of BSP and banking sector on microfinance operations; and promote and advocate for the development of sound and sustainable microfinance operations.

CDA might have done its part in providing an enabling environment for cooperatives, but its efforts had not gotten much notice or recognition, unlike those of the BSP, which earned worldwide accolade.

What do you think?  (END).

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