Friday, January 14, 2005
2005 is International Year of Microcredit
Low income people often resort to informal lenders to augment their meager capital because they lack access to the services of financial institutions. Through microfinance, poor people with microenterprises are able to secure small loans to provide them the means to create more products, improve their services, expand their market, and ultimately increase their income and economic activities. There is sufficient evidence to confirm that low-income people are able to save, repay their loans and use credit productively.
Recognizing the potential of microfinance as one of the effective tools to meet the UN’s millenium development goal of reducing by half the incidence of poverty worldwide by the year 2015, the United Nations declared the year 2005 as the International Year of Microcredit.
In the Philippines, where poverty is prevalent and where many poor people manage some sort of microenterprise, microfinance seems like a good solution. By invigorating microenterprise, households communities and local economies are spurred toward progress.
Planters Development Bank declared its full support for IYM 2005. Through its own operations and that of Davao-based affiliate Micro Enterprise Bank, Plantersbank aims to widen and deepen the reach of microfinance services to low-income people to help them run better businesses and ultimately, live better lives. Plantersbank affiliated SME virtual community SME.com.ph is sponsoring the official Philippine IYM website www.microfinance.com.ph.
Microfinance is defined as the provision of a broad range of financial services targeted to low-income clients. It includes credit, savings, insurance, remittances and payment services. Providers of microfinance include non-government organizations, cooperatives, credit unions, rural banks, thrift banks, state-owned banks, mutual benefit associations and insurance companies.
With microfinance, people can move from day-to-day survival towards planning for the future—investing in better nutrition, housing, health and education for their children.