By PNA and U.S. News Agency / Asian

Outstanding microfinance loans for the first three months this year reached P7.3 billion.

Pia Roman-Tayag, head of the Bangko Sentral ng Pilipinas’ (BSP) Inclusive Finance Advocacy Staff (IFAS), in a briefing here said the loans were extended to almost a million clients.

She said in the first five months this year alone, some 200,000 microloan borrowers were extended P1.45 billion worth of loans.

She said 202 banks, mostly rural banks, around the country now offers microfinance products.

Of the total, 21 banks now offer housing microfinance and 24 banks are offering micro-agri loans.

The BSP earlier targeted to have one million microfinance clients in the country and this feat is not a dream anymore, only after a few years of introducing microfinance in the country.

Thus, the central bank now targets a 20-percent annual growth in the number of microfinance clients.

Microfinance covers financial services that include deposits, loans, payment services, money transfer and insurance products specifically made for the low-income group.

Microfinance loans, for one, have a maximum loanable amount of P150,000 but the average is P8,000.

BSP Deputy Governor Nestor Espenilla Jr., during the same briefing, said default rate in microfinance loan payment is almost insignificant.

Share of these loans in the banking sector’s total loan portfolio is about two to three percent.

Espenilla explained that the country ranks first in the world in terms of microfinance regulatory framework.

“We are the only non-G20 country that are included in the consultation for the formulation of microfinance programs,” he said.

The central bank official said they are really pursuing the implementation of microfinance program around the country to help alleviate the lives of the poor by giving them access to funds.

He cited that only 610 or 37 percent of the 1,634 municipalities in the country have banking office because most of these areas are in remote places.

Thus, in October 2010, the central bank allowed banks to put up micro banking offices (MBOs) to increase the number of people who have access to banks.

MBOs serves as extension office of banks but are smaller in terms of area and the products and services they offer.