Microfinance Reviewer Weeks 1-8 (PDF)

WEEK 1 MACHINES MASTERY Micro - up to 3,000,000 BUSINESS MODELS Small - 3,000,001 - 15,000,000 MARKETS Medium - 15,000,001 - 100,000,0...

WEEK 1 MACHINES MASTERY Micro - up to 3,000,000 BUSINESS MODELS Small - 3,000,001 - 15,000,000 MARKETS Medium - 15,000,001 - 100,000,000 NEGOSYO CENTERS MSME account for 99.5% total number of Business registration assistance establishment; Business advisory services Business information advocacy Employ total labor force 61.6 % Monitory and evaluation Contribution to total added value 36.7% All exporters are MSMEs 59% Atleast 8% for micro and small enterprises and atleast 2% for medium enterprises of 900,914 establishment by enterprise size their total loan. (June 2008) 7,766,689 enterprises by total employment ASENSO Program Distribution of MSMEs by industry; agriculture, 207,448B from 2011 to 2015 forestry, fishing, mining, air conditioning 249,606 MSME borrowers supply, etc. 2.618M jobs BARRIERS TO MSMEs P3 is a funding program designed to provide Non financial [poor business microenterprises an alternative source of environment, high cost, lack access to financing. Microenterprises and entrepreneurs market, low productivity and efficiency] that do not have easy access to credit and Financial [lack of access to finance] accessing credit very high interest, are the primary beneficiaries of p3. MSME LAWS SME Roving Academy Continuous learning program for the R.A 9501 or R.A 6977: Magna Carta for Micro, development of MSMEs ton enhance Small, and Medium Enterprises competitiveness and increase Creation of SB corp and mandatory contribution to the country’s GDP. allocation of credit resources for MSME lending. MENTOR ME PROGRAM (DTI) R.A 9178: Barangay Micro Business Enterprises Aims to help MSME thru COACHING (BMBEs) Act AND MENTORING. Granting them incentives and other benefits. Exemption from income tax Special credit window INDUSTRY CLUSTERING Enahncing industry competitiveness to R.A 10644: Go Negosyo Act develop and expand exports; Negosyo centers Industry focus, convergence, private Start up fund for MSMEs sector active involvement. MSMED council SHARED SERVICE FACILITIES (SSF) This project provides machinery, SME Development Plan 2017-2022 equipment, tools, systems, accessories, More globally competitive, regionally and other auxiliary items. integrated, nationally resilient, highly sustainable and productive. Trade Fairs Sikat pinoy DTIs 7Ms Manila fame MINDSET Ifex MONEY ASEAN MENTORING WEEK 2 backgrounds or those who lack access to traditional financial services. Microfinance, also called microcredit It is a type of banking service that is provided to Financial services that are offered to unemployed or low- individuals of lower socioeconomic income individuals or groups. It is also the provision of savings accounts, MICROFINANCE OBJECTIVES loans, insurance, money transfers and other banking services ASA (Association for Social Advancement) Microfinance includes a number of services, To ensure cheaper credit access to poor such as savings accounts, checking accounts, communities through an appropriate and fund transfers, microinsurance, and microcredit. innovative alternative financing system; Aims to support and kickstart entrepreneurs To establish the right of women at all levels to who do not have the financial backing to participate in income- earning activities and begin a small business or capitalize on an to facilitate their involvement in participatory. idea. To increase household CBU (savings) and It has two bottom lines: one is financial and income and to create opportunities for the other is social. self-employment, To eliminate informal moneylenders who charge exorbitant interest rates; HISTORY OF MICROFINANCE To contribute to the socio-economic existed since the 18th century; development of urban and rural poor communities through providing financial The first occurrence of microlending is support and services to the clients. attributed to the Irish Loan Fund system, introduced by Jonathan Swift, which sought to Microfinance Models improve conditions for impoverished Irish 1. Banking for individual entrepreneurs, citizens; relationship-based banking. 2. Services for a group, where multiple Modern form, microfinancing became individuals come together to form a popular on a large scale in the 1970s; group to collectively apply for a loan. The first organization to receive attention was Benefits of Microfinance the Grameen Bank, which was started in 1976 by Muhammad Yunus in Bangladesh. Inclusion of the poor into the financial systems; Opportunities to start-up; Muhammad Yunus in 1983, microfinance was Lower interest rates compared to local money simultaneously created. Grameen Bank’s goal lenders; was to initially provide small loans to Self-employment; entrepreneurs. Opportunity for education and community Development. 2006, nobel peace prize was awarded to both Financial independence and resiliency to be YUNUS and GRAMEEN BANK. able to cover any large unforeseen expenses; Financial services to those in remote locations Grameen bank, [government loan, borrower’s where traditional financial institutions do not savings, foundation grants] have operations; and Microfinance can encourage entrepreneurial activity and business development in poverty stricken areas. Key Features of Microfinance Lend to the poor Do not take security (Collateral) WEEK 3 & 4 Prefer saving over borrowing Small short term loan Formal sector financial institutions have: Cost covering interest rate Collateral requirement Group appraisal and guarantee Credit rationing Target group- women Preference for high income Lengthy procedure of loan sanctioning Target Groups (developing countries, Unemployed/Low-income Individuals, women) Poor the lower income group are facing the major problems in accessing credit; Microfinance exist all around the world, the Lack of assets for collateral majority of Lack of financial records microfinancing operations occur in Limited credit history developing nations, such as: Microcredit refers to small loans offered to the poor or unprivileged who lack collateral. Uganda; Microcredit aims to ensure an alternative source Indonesia; of credit for the poor. Phillippines; Serbia; GRAMEEN BANK DOES NOT REQUIRE A Bangladesh; COLLATERAL. India; Group guarantees Nepal; and Each group contains members Honduras Only two members are allowed to loan at first time, Services provided by Microfinance Don’t use legal instruments but trust Grameen bank targets the poorest of Credit facilities, the poor, particular emphasis on women Saving accounts, in bangladesh. Loan for small Grameen bank founded in DHAKA, Investments, BANGLADESH Money transfer, Remittance, and Rural banks and cooperatives started the Insurance. concept and practice of servicing small loans as early as the 1960s. 1970s until mid 1980s, the government 5 Biggest Microfinance Companies mobilized rural banks, development banks and other government financial institutions. 51Give (founded in 2007 in Beijing) Bank Raykat Indonesia (oldest existing Directed Credit Programs DCP failed due to MFIs) reasons; BRAC (founded in 1972 in Bangladesh) Did not reach target clientele Grameen Bank (holds the distinction of Corruption at different levels being a Nobel Peace Prize-winning MFI) Massive repayment problems Kiva Founded in 2005 and headquartered in San Francisco. Where can i access microfinance? Banks (rural, thrift, some commercial) NGOs Cooperatives WEEK 5  Individual lending Microfinance involves supplying financial Individual or business loan services and products to disadvantaged Housing loan populations that are excluded from the traditional banking system. Solidarity groups are peer group lending schemes. Members receive loans and then In Europe, Franciscan monks formed the mount make regular weekly or monthly payments. And of piety in the 15th century. its three principle goals; Providing services to the poor First savings and loan cooperative opened in Attaining financial self sufficiency 1879 in Germany’s Rhineland. Reavhinh a large numbers of clients The 21st century marked the international rise Community based organizations is differ from of MICROCREDIT solidarity in that they assume eventual The first microcredit took place in graduation of their borrowers from the lending washington in 1997. institutions. Develop internal financial G8 principles of microfinance in 2004 management capacity of the group in order to The UN named the “International year of create a mini bank. microcredit”. 1989, BNP Paribas committed to Group lending model individuals must form a promoting access to redit in emerging group of five day financial training in order to countries. receive a loan from grameen. KEY DATES; Group of groups lending 1989 - 1st ;oan issued top micro finance Borrowers form group institutions (MFI) Minimum of five 2006 - creation of microfinance dept. Screen and qualify loan applicants 2012 - integration of the microfinance MFI issues several loans to group dept into the group members and holds the group. KEY FIGURES; Individual lending defined as the process of 248 million euros in loans and providing credit to one client, thereby not investments in 2016 requiring other group members to serve as 18% support in 2016 compared with guarantors. 2015 309,000 people excluded from traditional banking system. The digitalisation of financial services has potential GDP boost of 3.7 trillion dollars, emerging countries by 2025. WEEK 6 In 2014, 1,045 microfinance institutions served 7 out of 10 do not have a transaction account. total of 111.7 millions customers. Gender: FEMALE 33% MALE 24% Between 2013 and 2014, the number of Age 13% ADULTS AGED 15 TO 24 & 35% borrowers tripled. ADULTS AGED 25 AND ABOVE Employment EMPLOYED 39% UNEMPLOYED 19% MICROFINANCE LENDING PRODUCTS Education 58% COLLEGE GRAD 28% DID NOT REACH COLLEGE Income class 72% UPPER CLASS 27% GROUP LENDING LOWER CLASS Solidarity group lending Group of groups grameen model PROBLEMS DUE TO FINANCIAL Products is deverse, well designed, EXCLUSION suitable, value adding Lack of credit access Providers divers, banks, coops, other Poverty trap non banks, responsive, responsible, National economic crisis innovative, strong and stable. Consumers financially included, Digital tech solutions for financial exclusion financially learned, adequately Lowering cost or extending services into protected. area Providing alternative credit scoring Why is financial inclusion important? methods for unbanked persons Financial inclusion, stability, integrity and Empowering individuals and small consumer businesses Supports broad based economic development FINANCIAL INCLUSION The unbanked, undeserved, low income, excluded population. A state wherein there is effective access to a wide range of financial services for all filipinos. What bsp doing for financial inclusion? As BSP says it refers to a situation where a Broad based inclusive growth public has effective access to a wide range of Policy, regulation and supervision financial products or services. Financial education and consumer protection A credit bureau helps financial institutions in Advocacy programs their lending decisions. Data and measurement A movable collateral registry will facilitate acceptance of movable assets as collateral for National retail payment system a policy and loans. industry cooperation framework Real property refers to land or real estate. General policy work enhanced the financial inclusion regulatory environment Benefits of financial inclusion Increased access to FS Better financial planning Batch eft credit acct to acct fund transfer Opportunities for wealth creation system, using the electronic payment, Improved economic gains and clearing system. instaPHay new eft service where banks Financial inclusion means to achieve broader and non banks e money issuers can aspirations. participate. Financial health is the ability of an individual to meet financial obligations, absorb and recover from financial shocks, and reach long terms. And individual is financially healthy when he or she: EFLP targeted different audiences Balances income and expenses 42 learning session in 2016 Builds and maintain reserves 55,000 participants reached nationwide Manages existing debts and has access 5 areas reached in 2016 to potential resources Caloocan Plans and priorities Bayombong nueva ecija Manages and recovers from financial Catbalogan city shocks Kalibo aklan Uses an effective range of financial Malolos city bulacan tools. 1,627 cities and municipalities covered by 4ps Vision of financial inclusion; 4.35M active household beneficiaries  Ayoko na ang haba ng 6… TT WEEK 7 Microfinance is a viable and sustainable provision of a broad range of financial services. DONORS TO NGOs TO LOCAL PARTNERS TO CREDIT OFFICER TO BENEFICIARIES Card bank inc. was incorporated in the philippines on July. 1, 1997. The bank granted the BSP on August 25, 1997 and formally opened business on Sept. 1, 1997. The banks offers a wide range of products and services such as deposit, loans, and treasury. Etc. Guys reviewing nyo nalang 7 and 8 ang haba late nako HAHAHAHAHAH