Technical Assistance to the Republic of the Philippines for Preparing the Microfinance for Rural Development Project

This paper discusses the key features of the Microfinance for rural development project in the Philippines. The paper states that the Asian Development Bank (ADB) has been playing a leading role in developing microfinance in the Philippines.

• Currently it provides assistance under the Rural Microenterprise Finance Project (RMFP), which supports credit and savings services and institutional strengthening and provides MIS software for MFI operations;
• Under the RMFP, the People's Credit and Finance Corporation (PCFC) is wholesaling credit funds to about 160 MFIs. This project focuses on providing microfinance credit and savings services to women;
• The lessons learned under the RMFP are the need to assist in:
  • Providing a wider range of microfinance services,
  • Developing the regulatory and supervisory mechanisms for MFIs,
  • Transforming microfinance NGOs into formal financial institutions
  • Building up the capacity of rural banks to offer microfinance services to the poor.
• To meet the growing need for microfinance services, the ensuing loan project is expected to build on the success of the RMFP and focus on deepening outreach to the poor.

The paper concludes by detailing the technical assistance (TA) program devised to assist the government in its goal of poverty reduction. It also presents the cost estimates and financing plan, implementation arrangements and the details of the operational methodology of the TA program.