Microfinance Week 10: Sustainability and Impact

Microfinance institutions must balance their social impact (helping the poor) with their financial success (making profit).

Microfinance, including Islamic microfinance, can help reduce poverty in Indonesia by giving people access to financial services.

Improving microfinance by changing products, services, or processes to help clients and institutions do better.

How well microfinance institutions use resources to achieve their goals (like reaching the poor).

Developing new financial products like lending options beyond just working capital.

The difficulty of balancing helping a lot of people (reach) with doing well financially (efficiency).

Economic problems and social issues affect microfinance's ability to help the poor.

Giving the poor access to financial services to help them grow individually and socially.

A minimum amount of money that a borrower must keep in a bank account as a condition for receiving a loan.

When an institution accepts money from individuals and businesses, promising to return it with interest.

An organization that lends out more money than it receives from equity build-up.

The accumulation of funds by a borrower, often as part of a loan agreement, to increase their ownership stake in a venture.

A body that oversees and regulates the operations of Microfinance NGOs.

The Council sets standards for good corporate governance for Microfinance NGOs, including fairness, management responsibility, and transparency. It accredits NGOs based on financial, social, and governance performance.

The Council accredits Microfinance NGOs that meet specific criteria, including strong financial performance, social impact, and good governance.

Accredited Microfinance NGOs are valid for a year unless the Council revokes their accreditation due to issues discovered through review.

The Council submits an annual report to the President of the Philippines and relevant committees of both Houses of Congress.

They implement systems for effective and sustainable financial operations, including resource management, asset-liability management, liquidity management, and financial information management.

They develop and implement systems to measure and improve their social performance, ensuring their activities positively impact the lives of low-income communities.

The Bangko Sentral ng Pilipinas and the Insurance Commission can request the Council to examine a Microfinance NGO to verify it is not engaged in unauthorized activities.

The Council can take actions against the NGO, potentially revoking its accreditation, if it finds that they are not operating within their authorized scope.

Non-profit organizations that provide microfinance services must have specific features, such as offering affordable credit, promoting business skills, and engaging in human development.

Microfinance organizations must recover their costs to continue offering services to the poor. This means they need to be financially sound.

Microfinance can include a variety of services, such as loans, savings accounts, insurance, and even housing assistance.

Microfinance goes beyond providing loans. It aims to empower individuals by offering training in leadership and entrepreneurship.

Microfinance organizations contribute to the well-being of the poor by offering programs and services that improve their lives.

Microfinance institutions can accept donations, grants, and contributions to support their operations and serve more people.

Microfinance institutions invest their funds in safe and responsible ventures, following government regulations.

Microfinance organizations maintain open and detailed records of their activities to ensure accountability and trust.

Microfinance targets individuals and families whose income falls below the poverty line, as defined by government agencies.

Microfinance encompasses a broader range of services, including money transfer, remittance services, and innovative programs designed to improve social well-being.

A type of bank that specifically serves the credit needs of low-income individuals and small businesses, helping them to improve their lives and build income.

These banks can be owned by private individuals, international organizations, or a combination of both.

A minimum amount of money that the bank must have available to operate, determined by regulations.

In addition to meeting capital requirements, organizers must prove their experience in microfinance or banking.

Banks supervised by the BSP that offer financial services to people in rural areas, often focusing on agriculture.

The BSP oversees the operation of rural banks, ensuring they follow financial regulations.

The BSP is responsible for regulating and monitoring various types of banks, including rural, cooperative, and commercial banks.

Rules that govern how many branches a microfinance bank can open, similar to general banking regulations but often with considerations for reaching their target market.

A thriving private market for microfinance services, supported by government policies and regulations.

Individuals and businesses in the informal sector, such as household-based entrepreneurs, farmers, artisans, and low-income earners.

To provide low-income individuals with financial services that allow them to sustain and improve their livelihoods.

The premium charged for microfinance products cannot exceed 5% of Metro Manila's daily minimum wage for non-agricultural workers.

The maximum amount of insurance coverage is capped at 500 times the daily minimum wage for non-agricultural workers in Metro Manila.

Government agencies, such as the Department of Finance, National Credit Council, and Insurance Commission, work together to regulate the microfinance industry.

A Philippine law that serves as the foundation for microfinance regulations and guidelines.

Detailed rules and procedures for implementing the Microfinance Act, ensuring its effective application.