HSBC willing to set aside P500M/yr for microfinance

HSBC is prepared to extend up to P500 million annually for the microfinance sector in the Philippines, a top bank official said.

Warner Manning, chief executive officer of HSBC Philippines, said they are prepared to extend the amount specifically to various microfinance institutions (MFIs), including cooperatives, non-government organizations, and rural and thrift banks.

Manning added that he is willing to hold talks with the People’s Credit and Finance Corp. (PCFC) for a possible cooperation in lending.

The PCFC is the lead government agency mandated to mobilize resources for microfinance services. Under its charter, it should receive P500 million funding annually from the Philippine Amusement and Gaming Corp. (Pagcor).

PCFC president and chief executive officer Edgar V. Generoso, in an earlier interview, said that they are in the market for funding sources either from GFIs, multilateral agencies, and other private institutions.

"We would be needing another P3 to P4 billion in the next few years," Generoso said.

HSBC said that it is entering the microfinance lending market in three underdeveloped countries including India and Brazil.

But the bank said they will be limited to lending to MFIs instead of directly working or lending to microentrepreneurs. That is the same position taken by most commercial banks which are willing, but do not have the necessary infrastructure or expertise.

Other commercial banks that have expressed willingness to directly or indirectly get involved in microfinance are the Bank of the Philippine Islands, Allied Banking Corp., and Planters Development Bank.

In contrast, a large number of rural banks have devoted a significant portion of their loan portfolio to microlending while others have converted some of their branches for microfinance.