Microfinance Development Program

The program has successfully eased the constraints to expansion of microfinance services, but outreach to the poor needs to be improved. Within the broad context of inclusive growth, the growth and commercialization of the microfinance sector increased access to financial services, created jobs, and increased financial literacy. However, outreach to households below the poverty line remains limited. In view of the program’s stated objective to improve household income, reduce poverty, and reduce the vulnerability of the poor, there is a need to improve the breadth and depth of outreach to the poor. Support for strengthening social performance of MFIs may be considered to improve outreach to the poor. The initiatives of BSP, People’s Credit and Finance Corporation and microfinance network organizations in promoting financial literacy and consumer protection should be continued, as these develop the capacity of the poor to increase access to and use financial services. Further, MFIs should take full advantage of BSP’s responsiveness to advances in technology through mobile banking and e-money, as these offer tremendous opportunity to deepen and expand outreach to the poor.