Franciscan College of the Immaculate Conception, Baybay, Leyte, Inc.

Baybay City, Leyte

A.Y. 2017-2018

FM 32
Qualitative Research

“Microfinance in Baybay City, Leyte”

Macaraya, Karen
Italio, Ipiphaniae
Submitted by

Mrs. Lolita Alba

Submitted to
 I. PURPOSE OF THE PAPER

The purpose of paper is to understand the state or condition of

microfinance in City of Baybay that focuses the role it gives to the small
entrepreneur or stallholder.

II. OBJECTIVES
The researcher had to conduct this study for better understanding of the
following:
1. To know the socio-economic factors that motivate.
2. The different product that offered by microfinance.

III. METHODOLOGY
The researchers are not able to conduct special strategy in this research
which is interviews but other data are gathering enough information with the
following:
1. Books
2. Internet
3. Article

IV. DEFINITIONOF TERMS

Microcredit – is another term for microfinance
BSP – Bangko Sentral ng Pilipinas
 V. DISCUSSION

Concept of Micro-Finance

BSP, Philippines’ apex banking body defines Microfinance, as the viable

and sustainable provision of a broad range of financial services such as
microcredit, savings, insurance, money transfers and similar financial products,
by the private sector to poor and low-income households engaged in livelihood
and microenterprise activities using nontraditional and innovative methodologies
and approaches. The principle difference between microfinance and traditional
lending arrangements is the absence of collateral with which to secure a loan.It
is pertinent to mention that Microfinance is NOT subsidized credit, NOT a dole
out, or salary or consumption loans. Microfinance can provide long term, stable
credit access only when borrowers have the willingness and ability to meet
scheduled loan payments. The typical clients of microfinance are the
economically-active, entrepreneurial poor. These include household-based
entrepreneurs, farmers, rural artisans, and individuals in the informal sector.
These people will be able to sustain and enhance their livelihood if they are
provided with effective access to a wide range of financial products and services.
It is also a term for the practice of providing financial services, such as
microcredit, microsavings or microinsurance to poor people. By helping them to
accumulate usably large sums of money, even the interest rate is higher than
those banking institution. But for the need of money or capital they will take risk
to start a small business.
A good number of poor households in the Philippines are engaged in
microenterprises. A In City of Baybay there are a lot of Microfinance institution
like CARD, RAFI Micro-Finance, ASA Philippines Foundation, Dungganon Bank
Inc., Taytay Sa Kauswagan Inc. and etc. Mostly people of Baybay City are part
member of those microfinances and by observing small entrepreneurs or vendors
around the city prove the role of microfinance in the city. The typical clients of
microfinance are the economically-active, entrepreneurial poor and specifically
women. These include household-based entrepreneurs, farmers, rural artisans,
and individuals in the informal sector. These people will be able to sustain and
enhance their livelihood if they are provided with effective access to a wide
range of financial products and services.

1. Socioeconomic factors are the social and economic experiences and

realities that help mold one's personality, attitudes, and lifestyle. The
socio-economic that stallholders motivate in availing loan are mostly for
capital. To be able to start a simple carinderia, snack house, barbeque or
other small entrepreneurship you need money as the basic tool to start
earning income for other purposes like source of income in education (one
of example of socioeconomic factor).
 2. Product offer by microfinance based on Bangko Sentral ng Pilipinas

Micro-deposits

 Savings account that caters the needs of the basic sectors and low-income
individuals
 Has minimum maintaining balance not exceeding Php 100
 No dormancy charges
 Average daily savings account balance does not exceed Php 40,000

Micro-insurance

 Insurance, insurance-like and other similar products and services for risk
protection and
 relief against distress, misfortune and other contingent events of the low
income sector
 Premium computed on a daily basis and does not exceed 5% of the
current daily minimum
 Wage for non-agricultural workers in Metro Manila
 Coverage is not more than 500 times the daily minimum wage for non-
agricultural workers

Microenterprise Loan Plus

 Loans granted to the basic sectors on the basis of the borrower’s cash
flow for
 their growing microenterprises and small businesses
 Loans from Php 150,001 to Php 300,000

Housing Microfinance Loans

 Loans granted for the purpose of home improvement and house

construction, house and/or lot acquisition
 Loans up to Php 150,000 for home improvement
 Loans up to Php 300,000 for house construction and house and lot
acquisition

Micro-Agri Loans

 Loans granted for the purpose of farm activities,

 agribusiness and other farm-related fixed assets
 Loans up to Php 150,000
Other Related Research
Policy and Advocacy
 Bangko Sentral ng Pilipinas (BSP) was mandated by the General Banking
Law of 2000, to establish rules and regulations for the practice of
microfinance within the banking sector. Subsequent to this law, the BSP
declared Microfinance as its flagship program for poverty alleviation. It
has focused its microfinance initiatives on policy and regulatory
environment, training and capacity building, and promotion and advocacy.
 The National Credit Council (NCC) was established by the government to
create an enabling policy environment to encourage greater private sector
participation in the delivery of financial services to the poor. The NCC
published the National Strategy for Microfinance, the regulatory
framework for Microfinance, and the Performance standards for all types
of Microfinance Institutions in the Philippines.
 NAPC: The National anti – poverty commission, is the government agency
responsible for coordinating all government – supported poverty reduction
programs.

From humble beginnings, successful microentrepreneurs are starting to shape

the future of the society by providing reliable sources of income for their family
and generating employment. Microfinance has helped the poor uplift their lives,
communities and local economies. Indeed, microentrepreneurs are exemplary
models of economic heroism in the country.

“The success of many Filipino microentrepreneurs who overcome difficulties with

creativity and tenacity tells us that we are on the right track; that we should continue to
work together to make the microfinance sector better, bigger and more inclusive.” - BSP
Governor Amando M. Tetangco, Jr
 VI. Bibliography

https://www.scribd.com/document/92714/Microfinance
http://www.businessdictionary.com/definition/capital.html
Business Organization and management page 109
http://www.bsp.gov.ph/downloads/Publications/2013/FIP_2Qtr2013.pdf
http://classroom.synonym.com/definition-of-socioeconomic-factors-
12079366.html
http://www.microfinancecouncil.org/wp-content/uploads/2012/11/DP-
2012-1_Multiple-Borrowing_Review-of-Literature.pdf
http://www.dlsu.edu.ph/research/centers/cberd/pdf/microfinance-in-the-
philippines-habaradas-umali-final-2013.pdf