Is the Promise Being Fulfilled?...Microfinance in the Philippines: Status, Issues and Challenges

This note looks at the changes in the concept of microfinance, and its promise to provide and improve access to financing for micro-entrepreneurs in the Philippines. It discusses the status of microfinance, and the outstanding issues and challenges that it faces.The note also provides recommendations to meet the challenges. It also discusses the impressive gains made in the last three years, and states that medium and small sized MFIs have shown significant gains in outreach and sustainability. The issues facing microfinance development, according to this note, include:

• Threat of policy reversal;
• Emerging credit pollution;
• Need for appropriate regulation and supervision;
• Effective regulation of credit cooperatives/credit unions;
• Use of performance standards; and
• Building the capacity of MFIs.