The Mindanao Microfinance Council (MMC) recently held a forum in which several proposals were made to expand and enhance microfinance in the Philippine state. The forum convened as a reaction to the spread of “Bombay” lenders, Indian nationals who move to the area and act as “informal money lenders,” providing loans to locals at high rates. One proposal to fix the problem came from Assistant Secretary of the Department of Trade and Industry (DTI), Merly Cruz. Her plan involves the government-owned Land Bank of the Philippines’ National Livelihood Support Fund (NLSF), the country’s largest development institution. Cruz proposed that the fund loan directly to cooperatives and “market vendors associations” which would in turn supply loans to members. She mentioned that this would create more competition in the credit market and lower the market interest rate. Currently, there are no laws, aside from standard business permits, which regulate the “Bombay lenders” but Cruz argued that competition from NLSF funds could limit their spread.
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