Philippines 4th In Microfinance Ranking

EIU Report

By CHINO S. LEYCO

October 26, 2012, 5:35pm

The Philippines has ranked fourth in an annual global survey on microfinance business environment, based on the Economist Intelligence Unit's (EIU) report, citing the country's stable market.

According to the report, the country scored 63.3 points, up by 4.8 points, or two notches higher compared with last year's Global Microscope on the Microfinance Business Environment report.

The Philippines ranked fourth out of 55 countries in an annual global survey, trailing behind Peru (79.8 points), Bolivia (71.8 points), and Pakistan (67.4 points).

The Microscope 2012 survey was conducted in the 12 months ending in June.

EIU explained the rankings were based on regulatory framework and practices, in which the Philippines was placed on top along with Peru; and the supporting institutional framework, wherein the country ranked 15 along with Brazil, Nicaragua, and Uruguay.

The survey also noted the "stability" of microfinance markets, if they are vulnerable to any political shocks.

 “The Bangko Sentral ng Pilipinas continues to promote an enabling environment for microfinance, seeing it as one of its key poverty reduction efforts,” the report read.

The survey has also recognized key efforts of the BSP such as increasing the ceiling for microfinance loans to P300,000 from P150,000 and the lower house's approved measure allowing foreign ownership of up to 40 percent in rural banks.

The proposed measure, however, remains pending in the Senate.

In January, the BSP approved a microfinance loan called “microfinance plus” that microenterprises and small businesses can avail of to fund their expanding operations, allowing borrowers to take out a maximum of P300,000 to fund their growing business

Microfinance, generally, has originally intended to mean financing for microenterprises or small livelihood activities but the BSP has since expanded the loan products to include microfinance housing, micro-agri loans, micro-insurance and micro-deposits.

For all loans, it starts with P150,000 up to a maximum of P300,000. Currently, there are 202 microfinance institutions operating in the Philippines.

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What kids can learn about money, according to age.

CHILDREN ARE like sponges; they generally absorb knowledge fast. Parents can take advantage of this wonderful time by teaching them about money early on.

In Rich Kid Smart Kid, author Robert T. Kiyosaki wrote: “I am often asked, ‘At what age should I start teaching my child about money?’ My answer is, ‘When your child becomes interested in money.’”

Lifestyle trainer Chinkee Tan, author of the book Till Debt Do Us Part, shares that kids can be taught about money as early as four years old.

“Here are the ages at which a child can start learning about money,” says Chinkee, “and the kinds of things he or she is probably able to learn at that stage:

Ages 4-5: What Money Does and Is

Show the connection between what your child wants to buy and the money needed.

Ages 5-6: Where Money Comes From

Reward for good behavior or task completed should be EARNED.

Ages 7-8: How To Save

Set aside a portion of every peso your child receives from loved ones or relatives as savings. Teach your child the value of savings.

Ages 8-11: How To Invest Your Money Wisely

Save money through banks and other financial institutions. This allows the child to understand the effect that interest has on his or her money.

Ages 11-14: How Money Works

Money can be generated by getting into business. Money issues like borrowing, making loans and its effects should also be discussed. The goal is for the child to understand the pros and cons of borrowing.

Ages 14-18: How to Make More Money

At this age, a child also needs to understand how these things work: personal budgeting, overdrafts, credit cards, bank charges and so on. The goal is for the child to be independent in handling his or her personal finances.”

Here in the Philippines, money is taught as early as preschool. It is part of the Math curriculum. But always supplement at home what is taught in school.