MABS gets 3-year extension, more funds

A United States Agency for International Development (USAID) program for microcredit has proved so successful that it was extended by another three years with a grant worth $3.5 million (roughly P178.5 million) mainly in technical assistance.

The Microenterprise Access to Banking Services (MABS) is a joint undertaking of the Rural Bankers Association of the Philippines (RBAP), the Office of the Presidential Assistant for Mindanao, and the USAID. It provides assistance to rural banks to enhance their capability "to provide banking services to microenterprises in both loans and deposit services in a profitable manner."

Lawyer John V. Owens, head of the MABS program said that the grant will cover training of RBAP personnel, and representatives of rural banks and their branches wanting to engage in microfinancing. So far, 74 rural banks have been the direct recipients of the program majority of these located in Mindanao while the others are in the Visayas and Luzon regions.

Another 2,000 representatives of various rural banks nationwide have also attended training sessions, which could be increased three to four times with the three-year extension.

RBAP president Nicolas Lim said that the association is confident in hitting the target 110 rural banks while expanding the micro-borrowers to at least 50,000.

Lim added that the domestic economy would directly benefit from the microfinance initiatives of the rural banking sector since a healthy domestic economy can weather the global recession.

"Immediately, the countryside where the bulk of the population is located are generally unaffected by the performance of the Philippine peso in the global markets. Micro-entrepreneurs are just looking for accessible and reasonable credit to get the local economies going and that would also benefit the rural banking sector," the added.

Meanwhile, A MABS program report strongly recommends that the RBAP should be prepared to assume the continuation of the program beyond the three-year extension.

The RBAP, through its Rural Bankers Research and Development Foundation Inc. (RBRDFI), has been in the forefront of microenterprise and microfinance development. It is envisioned that the RBRDFI would ultimately develop a pool of trainors that would launch outreach programs to all its members nationwide.

"Maximum emphasis on RBAP institutional development and the appropriate transfer of the MABS approach methodology to RBAP. The program must continue to provide maintenance support to participating banks while it must expand to new participating banks and branches, particularly in areas not currently served, in Mindanao and other parts of the Philippines," it added. – TPTorres