Question & AnswerQ&A (BSP CIRCULAR NO. 273)
It approved the partial lifting of the general moratorium on the licensing of new thrift and rural banks to allow the entry of microfinance-oriented banks under certain criteria.
Microfinance-oriented banks may be either thrift banks or rural banks.
The capital should be owned by private persons, multilateral entities, or a combination thereof.
The minimum paid-in capital shall be ₱5 million or the applicable existing capitalization requirement for a new rural bank, whichever is higher.
At least 20% of the paid-in capital must be owned by persons/entities with microfinance experience; majority of board members must have microfinance experience with at least one member having banking experience; and the bank must have an adequate loan tracking system for daily monitoring.
A vision and mission statement showing commitment to low-income clients and a written manual of operations including administrative and credit program systems consistent with microfinance principles.
At least 50% of the bank's gross loan portfolio shall consist of microfinance loans.
Yes, for microfinance organizations applying to establish or convert into a bank, the 2-year banking/finance experience can be substituted with microfinance experience provided the officer is a college graduate.
Microfinance-oriented banks are exempted from the general moratorium and may apply to establish branches after one year of profitable operations, subject to standard branching requirements and possible additional capital requirements.
Microfinance is the provision of a broad range of financial services such as deposits, loans, payment services, money transfers, and insurance to poor and low-income households for their microenterprises and small businesses to improve income and living standards.
Core principles include the poor needing access to appropriate financial services, their capability to repay loans and pay real costs, microfinance as a poverty alleviation tool, aiming at sustainability and outreach, and developing performance standards.
They are typically unsecured or secured depending on borrower's capacity, short-term (about 180 days), with monthly or more frequent amortizations, often featuring joint guarantees rather than tangible collateral.
Interest rates should be market-based and reasonable, enabling recovery of administrative, operational, and funding costs, rather than subsidized rates that could hinder sustainability.
Segments include landless agricultural workers needing credit for consumption and productive assets; small farmers and urban informal workers needing working capital; and medium farmers/small entrepreneurs with inadequate formal credit access.