By Amaka Agwuegbo
The Economist Intelligence Unit (EIU),the business information arm of The Economist Group, has declared Philippines as the best in the world in terms of its microfinance environment.
The study conducted by the EIU looked at 55 countries and measured each countryâ€™s state of regulatory framework, investment climate and institutional development.
â€œIn 2009, the First Annual Global Microfinance Index and Study declared the Philippines as the best in the world in terms of its microfinance regulatory framework,â€ the study added.
In all, the Philippines ranked third overall worldwide in terms of microfinance business environment.â€œOverall, the Philippines ranked third in the world following the usual microfinance leaders – Peru and Bolivia,â€ the study stated.
Latest figures show that 214 banks involved in microfinance have outstanding loans of over P6.4 billion to nearly 900,000 micro-entrepreneurs who have over P1.5 billion in savings.
The BSP was mandated by the General Banking Law in 2000 to recognize microfinance as a legitimate banking activity and to set the rules and regulations for its practice within the banking sector.
The BSP has, since then, institutionalized microfinance within the BSP and has proactively taken significant initiatives to enable the development of sustainable microfinance.
â€œIn the past nine years, the BSP issued 18 circulars and undertaken major activities and initiatives for microfinance.
â€œIn recent years, the success in microfinance development has paved the way for further efforts to build an inclusive financial system,â€ the BSP said.
The BSPâ€™s three-pronged program include the provision of policy and regulatory environment, increasing the capacity of the BSP and the banking sector in microfinance, SME, finance operations, and promoting the development of a sound, sustainable and inclusive financial system.