A Closer Look at Multiple Borrowing in the Philippines
This Note presents summary results of a study that looked at the phenomenon of multiple borrowing among MFI clients in the Philippines. The study aimed to contribute to the body of knowledge to better understand multiple borrowing and its link to over-indebtedness.
MicroSave partnered with Tulay sa Pag-unlad, Inc. (TSPI), an MFI in the Philippines with 250,000 clients and 30 years of services to micro- and small entrepreneurs. The study administered a detailed questionnaire to 151 urban women microentrepreneurs with outstanding loans from TSPI. The survey examined clients’ borrowing habits and their views on multiple borrowing. Study findings indicate that MFIs in the Philippines and elsewhere may want to consider the following activities to better respond to the target market and prevent multiple borrowing to lead to over-indebtedness:
- Continuous innovation of products and services;
- Client protection strategies;
- Information sharing at the industry level.
The study concludes that MFIs and the microfinance industry can view multiple borrowing as an early warning sign of the need to improve products and services to better meet and serve the needs of the low income market.
