MICROCAPITAL STORY: Mindanao Microfinance Council Looks to Conduct Study on Microfinance Penetration and Benefits in the Region

The Mindanao Microfinance Council, Inc. (MMCI) will conduct a study to assess microfinance activities. More specifically, the study will focus on whether microfinance beneficiaries are benefiting from microloans as well as how to improve access to certain regions. Mindanao is the second largest and easternmost island in the Philippines and includes the predominantly Muslim provinces.

The council’s executive director, Jeffrey R. Ordoñez, believes the study will cost 2 million Philippines Peso (approximately USD 47,523). In an interview, Mr. Ordoñez also stated that the study should begin this year, and a major aspect will be determining if microfinance services have improved their beneficiaries’ lives.

The second major focus of the study will map out areas on the island that will benefit from further penetration of microfinance services. Currently, there is an uneven dispersion of loans across the island, with the Autonomous Region in Muslim Mindanao (ARMM) having the lowest penetration. For instance, the P 104.4 million (USD 2.5 million) of loans in ARMM pales in comparison to the P 2.21 billion (USD 52.3 million) of loans in Northern Mindanao, the P 1.35 billion (USD 32.1 million) of loans in Caraga, the P 1.22 billion (USD 29.0 million) of loans in the Davao region, the P 1.07 billion (USD 25.4 million) of loans in Socksargen, or the P 740 million (USD 17.6 million) in the Zamboanga Penninsula.

The MMCI has set a 2010 goal of serving 1 million active microfinance clients in Mindanao is 100 percent of its provinces and towns. In addition, the council has placed a priority on the 10 poorest provinces and frontier areas. In 2006, the MMCI also held a forum to discuss the expansion and enhancement of microfinance in Mindanao, given the spread of what they believed was predatory lending. Further details on that forum can be found in the following MicroCapital story.

Formed in 2003, the MMCI originally was made up of 32 MFIs in Mindanao. As of February 2008, the MMCI had 42 regular member institutions, comprising of 22 rural banks, 9 non-government organizations, 8 cooperatives, and 4 cooperative banks.

by Jennifer Lee

Additional Resources:

Philippine Information Agency: “Mindanao Microfinance Council to conduct beneficiaries’ assessment”, by Prix D Banzon, April 22, 2008.

GMA News.tv: “Study seeks to improve access to microfinance in Mindanao”, April 24, 2008.

Bloomberg: Foreign Currency Exchange Calculator

MicroCapital: “Philippines; Mindanao State Holds Microfinance Forum, Possibility of Capital Market Saturation Mentioned”, October 19, 2006.