Microfinance joins People Power against poverty

MANILA, Philippines –  President Aquino has vowed to carry forward people power against poverty by utilizing microfinance as a pivotal element of his poverty reduction strategy.

“We will continue the revolution my mother started in making entrepreneurship among the poor a strategy for poverty alleviation. We will make microentrepreneurship one of the key elements of our framework for poverty reduction and inclusive economic development,” Aquino said in his keynote speech during the opening of the “People-Powered Markets” exhbit and 5th Year Anniversary of the PinoyME Consortium in Taguig City last week.

Aquino said his administration will carry out policy reforms to support microentrepreneurs and microfinance insititutions.

“We will work to institutionalize the National Strategy for Microfinance that was formulated in 1998. We will also make sure that microcredit will not be used as a tool for political patronage. And we will likewise consolidate the remaining credit programs for the poor under the more competent branches of government to make them more efficient and effective.”

Microfinance is the practice of providing credit, insurance, savings and remittance services to enterprising people in poor communities so they can set up small businesses. According to Aquino – whose mother former President Corazon Aquino started PinoyME in 2006 – microfinance “helps people to earn additional income, thus reduces poverty and strengthens poor people’s resiliency to external shocks such as calamity.”

The President congratulated PinoyME and other microfinance institutions for their “continued work toward giving our countrymen more opportunities to defeat poverty through their own efforts.”

PinoyME or Filipino Microenterprises has been in the last five years a catalyst for microenterprise development in different ways. Aside from providing funds for microentrepreneurs; it has stimulated more academic research on microfinance, gathered information experts to help automate microfinance institutions, established a microfinance curriculum that is now being taught in two universities, and helped microentrepreneurs find outlets for their products.

Aquino also extolled the People-Powered Markets exhibit “as an effort by different stakeholders to give new meaning to People Power – one that makes poverty alleviation a long-term social project.”

People-Powered Markets shows the united effort of businessmen, NGO workers, and microentrepreneurs through “value chains that work for the people.” A value chain is a physical representation of the various processes that are involved in producing goods. An example is the chain between Jollibee Foods and farmers from Nueva Ecija and Bukidnon. Jollibee partners with the farmers for its requirement of fresh ingredients like onions and bell peppers. However, the two would not have been able to connect without the collaboration of Catholic Relief Service Philippines (CRS), which promotes market-driven strategies to facilitate farmers’ participation in the mainstram market, the National Livelihood Development Corporation (NLDC), a government corporation mandated to provide for the credit needs of farmers, and the Alalay sa Kaunlaran, Inc. (ASKI), a microfinance insitution that directly delivers the funds to the farmers cooperative.

Another model showcased in the exhibit is the Petron Bulilit Station, an easy-to-build gasoline station that can start with two to three product pumps but can be easily expanded as demand increases. The endeavor helps create new business opportunities for microentrepreneurs who are looking for viable investments.

To sustain the market encounter after the event, DPC, through the Electronic Yellow Pages (eyp.ph), is developing an electronic platform for People-Powered Markets. The site will be accessible to all value chain stakeholders and, over the longer term, is envisioned to be a virtual marketplace where big companies, small producers, consolidators, and other service providers can make inquiries, exchange information, forge partnerships, or even make transactions. The exhibit also featured lectures on niche marketing, social entrepreneurship, and how participate in the value chains presented in the exhibit.