Microfinance and Financial Institutions in Bukidnon

This report examines the relationship between microfinance and financial institutions in the Bukidnon province of the Philippines within the context of national and local poverty conditions. It discusses the role of microfinance in Bukidnons financial system, government involvement in provision of credit to low income groups and contributions of nongovernment microfinance providers.The report studies household credit sources, formal and informal financial systems in rural and urban Bukidnon and the contribution of microfinance to social security coverage. It states that despite government efforts, success of credit programs in Bukidnon targeting poverty alleviation has been limited. Reasons include ambiguous government policies and lack of market driven programs.The report identifies challenges and focus areas for the government in its efforts to improve microfinance access in Bukidnon. These include:

• Regulating private sector microfinance and providing assistance and incentives;
• Eliminating ambiguity in microfinance policies;
• Recognizing contributions of moneylenders, pawnshops and lending investors and improving their operations;
• Enabling MFIs to develop and institute savings deposit facilities;
• Minimizing risks of microlending for enabling lenders to offer schemes at reduced interest rates.