On a number of occasions, I heard during “coffee time” conversations among rural bank examiners that there was a comment made by a proponent of Micro financing that DRB Examiners, allegedly, are not promoting micro financing. I was taken aback by such a comment because I personally know that in the past, Rural Bank Examiners together with the Agricultural Credit Supervisors (ACS) had been exposed to this kind of lending. The concept of micro lending is not a new concept. It has been with us since the mid 70’s when the government under the Marcos administration promoted the Supervised Credit scheme as a tool to develop countryside economy. Supervised Credit financing including Masagana-99 and the selda system, I would say, is the forerunner of micro financing.
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During those times, the RB examiners and the ACS were working hand in hand with other government agencies to promote and implement the supervised credit scheme as a tool of the government to uplift the standard of living of the poor and improve countryside economy. There seems to be a similarity of objectives – don’t you agree?
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For whatever problems and difficulties the supervised credit scheme had during those times including the substantial arrearages and the losses suffered by some rural banks, I still consider the program (especially M-99) a success. It was during those years when the Philippines, a perennially rice importer became a rice exporter.
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Micro-financing today has probably patched up the many mistakes committed in the past where traditional collateral were set aside in favor of unsecured credit. They cater to small commercial borrowers instead of the riskier agricultural lending. This is, by all means, an improvement of the old.
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How then, can we be accused of not promoting something that is probably a better credit scheme? How then, can we renege from our duties as a supervisory agency by suppressing a program designed to uplift the living condition of the poor? How on earth could we, who have the feel of the countryside, negate an endeavor whose objective is to provide financial services to the majority of the poor household and micro-enterprises? How could we run counter to their idea of “helping the poor help themselves”? Who could be against the proposition of alleviating the sufferings of more than 37% of Filipinos living below the poverty line or suppressing a commitment of providing small enterprises easy access to credit?
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It is possible that there might be a few examiners who could have expressed their apprehensions on the past problems and pitfalls of unsecured lending experienced under the Supervised Credit Scheme. Apprising those concerned on the problems inherent to unsecured lending could not be concluded as action inimical to the promotion of micro financing. Even microfinance people will probably agree that even if this kind of lending has proven to be viable and at the same time gratifying to some bankers/creditors who have a deep sense of social commitment, it is definitely not an easy task.
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We want to assure all concerned that ARBEX and the Rural Bank Examiners are not anti-micro finance. We will not in anyway hinder whatever progress their proponents have made considering the Bangko Sentral is also committed to this proposition. It would be best, I believe, that a dialogue between the microfinance people and the ARBEX be arranged so that ideas could be exchanged freely and kinks be straightened out and together arrive at something to work on for the good and the success of micro financing!
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So, Rural Bank Examiners are not promoting micro financing – SEZ WHO?
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