Since 2004, HSBC has been piloting a number of microfinance projects around the world, varying from wholesale lending and credit lines to project support, cash management and foreign exchange handling.
Participating countries include India, where microfinance is provided to over 70,000 poor households in both rural and urban areas, Mexico where HSBC works closely with the largest microfinance institutions in that country and receives loans and accepts payments in HSBC branches, and Russia where credit facilities to Fund Opportunity Russia were provided.
Microfinance involves the provision of financial services to the entrepreneurial poor, a sector that has the most limited access to affordable financing due to credit considerations. Loans provided by Microfinance Institutions (MFI) usually involve no collateral and range from as low as P2,000 to up to P70,000. In a country like the Philippines, where a major portion of the population lives in poverty, microfinance is expected to help microenterprises flourish and eventually bring about progress for low-income individuals.
"Sustainable microfinance institutions are committed to support the microfinance needs of the bankable and credit-worthy entrepreneurial poor or the e-poor. Sustainable microfinance institutions are committed to triple bottom-line, such as institutional sustainability, economic viability of the e-poor and transformational development of the entrepreneurs," said Eduardo Jimenez, microfinance consultant for the BSP.
For the launch of the caravan in Marikina City, HSBC has also partnered with five established Microfinance institutions in the area namely ABS-CBN Bayan Foundation, CCT Credit Cooperative, Center for Agriculture and Rural Development, ASA Philippines Inc., and Barangka Credit Cooperative so that local constituents are made aware of their presence and are provided with easier access to their services. The Marikina run also featured an educational video on microfinance including real life success stories of borrowers, coaching sessions, as well as a talk on Financial Management and business tips by Entrepreneurship guru Professor Andy Ferreria.
"If businesses like HSBC are to prosper in the long-term, we must address the issue of poverty and find ways to collaborate with other institutions and government locally and worldwide," said HSBC Philippines CEO Warner Manning.
Incidentally, this is not HSBC’s first foray into Microfinance. Last year, HSBC launched the opportunity card to help Philippine migrant workers send the money they earn abroad back to their families in the Philippines more cheaply. By logging on to www.hsbcmt.com/opportunity, Filipinos in the US can transfer funds from any account in any bank or their credit card to fund the ATM card. Beneficiaries in the Philippines will receive the opportunity card and can withdraw the funds from any of 3,000 Cirrus or MasterCard ATMs nationwide.
HSBC has been involved in community building through its partnership with Gawad Kalinga, where it has donated a total of 100 homes. With the HSBC Microfinance Caravan, HSBC hopes that this initiative will take community building a step further by helping communities achieve self-sufficiency, productivity and growth.