When micro means big (Second of Two Parts)-A A +A
Sunday, January 12, 2014
THE Bangko Sentral ng Pilipinas (BSP) been tracking the growth of microfinance in the recent years, at least in so far as the banking system is concerned.
It is important to note, however, that there are also private and non-government institutions offering microfinance, so there may actually be more Filipinos in rural and far-flung areas that are able to access and benefit from microfinance products and services.
What we are certain about is that the industry continues to grow, and its products have gone beyond just credit and savings. Some microfinance groups also offer housing and house repair microfinance loans, health-related microfinance loans, and microinsurance.
This January, we are actually celebrating the National Microinsurance Month, an official event that has been observed since 2007. Following the same logic behind microsavings and microcredit, it offers affordable insurance - with smaller premium than the usual insurance products out there - to low-income individuals, so that their losses are covered in times of death or emergency.
It was first introduced around 2005, the National Strategy and Regulatory Framework for Microinsurance were finally signed and issued in 2010.
Although it is the Insurance Commission and not the BSP, that is the main government agency overseeing microinsurance activity, the BSP is still active in creating policy and regulation on microinsurance, at least for institutions under its jurisdiction, such as rural, cooperative, and thrift banks.
In his speech at the 2013 Citi Microentrepreneurship Awards (CMA) Awarding Ceremonies last December, BSP Governor Amando M. Tetangco Jr. emphasized to the various microfinance stakeholders in audience the importance of having insurance protection.
He said that microinsurance can protect the hard-earned gains of microentrepreneurs, especially amid destructive natural calamities that occur in the country, like the recent super typhoon.
Indeed, in trying times, for people with less or none at all, microfinance and all related micro- products and services can do wonders. That’s when we can say that micro is big.
Note: My book, Central Banking for Every Juan and Maria is now available in main branches of Fully Booked, Power Books, National Book Store, and University of the Philippines Press.