!

" # $

%& " # % $ # &$ " # # $

' ! '
()

' *
- !

+ (' )
" # $ ! % & !

, -
../// ('

' ( ) ( & %( (
" ( ( ( ( * ( " ) ( (+
 ' ! '
()
' *
(' )

! " # $

%& " # % $ # &$ " # # $

# ,-
+. # * .//0

! "1
2+ % $ ( "* (
.+ ( "
3+ " ( " %
4+ ' " !
2&' ) .///
.& 5 " ( "

* 1
' * % ) ( "
6 7 ( +
( " ( +

' "( ( ( "+ ,

"% ( ) " ( % % 8 "
% & ( (% " " %
) % +

' % (( ( ( * (
" % "+ ! % % * ( (
( "* ) ( ( * + ' * ( *"
( ) ./// ( ) + ' (
% % ) ) " ) " )
( "6 8 7 ( ) +

1
0 1 ) 2 (3* + 3 (

% " * + 9 !
# , " ( ( ! %" ./// ) % " (
( ) * ) % " ( ( .4+0: 6
* ;+. 7+

9 * , ;+< 6 % " ( ! % "7

9 * , 2+4 ( *" , 6 , .//47
( 4+4
(, ( 8 22/ .//. .//06 .//.7

% # % 6# 7 (
( ( ( " %
( % ( " & ( ( +

Demand and Supply Gap of

MICROFINANCE Loans
Rural vs. Urban, 1997 and 2000
Year Demand Supply Supply Gap
(in billion pesos)
2002 62.04 2.66 59.38
2003 69.42 3.35 66.07
2004 77.68 4.18 73.5
2005 87.31 5.38 81.93
2006 98.14 6.69 91.45
2007 110.31 8.25 102.06

=2 > ;/+//

' * " +
% ( " ( 5
( " "+

("
' % ? % " ( (
( " * ( 6 , 7 (
" ( &' %

2
6 ' 7 .//2&.//4+ ( ( ( % ) ( %
" ( ( * " ( *
% " ( " ( % +
(( % % " (
( " ( ( ( (
(( .//4 5 " * ) .//;&./2/ (
% 3 & ) ( (
* *" " ./2/ " ( + '
% , ) ( * ( + '
( " ( ( ( ) ( %
) % * & ( % ( (
% * * +
* 5 , 5 6 ,7 )
( 2@@0 ( .//. ) A! =B; 6
) % 6 7 ( A! =./ (
, ( % 6 , 7 ( A! =24+0 + C
D (
) ( , (
) % ( 8 +E

,'
' *4 , 4 (3* +

0 , **3 4 ( '
'3

# %( ( ( +
" , " ) "
% * + % ) * ) )
* ( " % , ( "
) + ,
* + % ( "
* , ( * % * ( *
( % * ( +
' 9 ( ( %
* ( * % 8 , + *
( * " ( ( * F %
* " * ( *" +' ( ) (*
* G % ) ( 4@: *" (
;2: *" % ) + ' , ) ( " H ( - I

3
 ( ) ( * ( ( + '
& ( % " ( &
( + ' ( * ) ( *
" ( +

**3 * 4 1

( %
( "+ ( * "& ) ( * "* ( (
% % + ! * ( (
( ( ( * ) %( (% * J
6 ( * "&
) ( * ( 7+
% ( 9 # ( % 8 " (
) * % % "* 6 *" * ( *
% * ( 7+ *
% , % ( " * *
" 8 ( ,+

5 4 ) * ( (

' 9 ( ( % ( ( ( * (
" + '
( ( ) * % ( ( % ( *
(* " + ) *
(+ ) *" * ) % ,
) ( ( ( %( *5 % * 5(
+ ) % ( ( % "
* )( " ( ( *" , + ' "* ( * %
( ( ( * " ( (
" +

6 7 4 '
3*8- ' , + 44 ' ( 4 '
(3 *

4
# " ( * ( *
( , J 1
• F " F
(
• 9 & F
• ! %
•
• "
• " (
• % ! %
% % * % "+
F) % ( ( , ) (
) 8 % " % (
( ) % % % + A " " ,
( ( )
% ( * *
( % + , ( ( *"
( ) "* * +
%" ( *" * ( (
( .//. ( ( ) ( ( (
* ) ) " ( %
* + F) % ) ( & ( % )
% " ( & + (( H I
* ) (( (H ) 5 I+
( 1 H % ) * ) *
( "( (
% " ) + ' % % " *
6 7 & ( % + ' * " * (
% & ( ( + '
( " ( " %
* ( * H I + ( 5
( % K * * ( ) % ( %(
) +H
% % L .//4 (
( 5 " ( "
% * ) ( ( *" 1
• ( ) ( ( % ( ( (
% " " 5 (

5
 ( ( & ? *
" ) % %( % " (( * % " (
( " & +
• ( ( % ( +
• , ) % ) ( (
& & "
) ( % *" ( * ( %
% K ( * ( ( *"
% & ( ( +

9 3* *1 *

' ( ( *" - (
* ( ( ( ( % * ") " % &
% H ( % * "*" * ( +I
M" ( (* ( "*" ( ( *" (
( ( " ( ( (
( ( ) + '
% " ( ( % * & +
(% ( " %% " (
* ( ( % ( ( + ! % (
% ( % ( % * "
+ ' ) % 5
( % % " ( %
( %+ % " " * ( (
") * " ( +
, ( % 6 7 + ( 9
- ' ), ( + 69-',7 (" ( ( *"
) " ("
+ ' , & ) (
( ( % ) " %
( "J % + ( )
( ( % (
) ( , +

6
 : , ) '

( *" + * N & (
% ! ( 6 !7 ) " % , ))
% A % " "
* ( " , ( K *" ( )
K K *" (
( ( *" % +
( & + & %
) + ' * " " ( *" ( )
) % (
( ) ( * (+ * "* (
( % J* % * + #
( ( * +
' " ( ( ) (
( ) (+ # "
( ) ( (
+ ' )( (
( + ( , ( ) ((
( % %( ( (& & + #
( *" % * (
( ( % "
+

/ , **

% 6 +7 3<+<:
! ( (# ./: 9 (
# 2<+.:

' * , % (
" ( % " % + %
" (* * * )
+
( ) ( ) %
( "
% & + * , %

7
* ( *
* " * ( (+

; '+

, % 1
• #% & ( * ( ( *" (
*" ,+ ' ( % G( * )
* ) * % +
% * * ( *
( % * (K
• #% * ( * % K
• A % * "*" % , K
• N ( ( *" ,J+

< ' ( , ' +

! * *" * J ( )
+ " * ( % ( 8
+
( ( % "
) ( " ( * ( (
" +

0 1 *4 , ) 4 * 4
4

! ( " ) " (
% ( % "
+

00 4 4
4 1 ' '*+* )*

( ( ( ( ?(
* % + ' * ( 8 " (

8
 (
G +

0 4
4 1 3( + '

% ( % " *
* ) + (( "
( % " ( ( 8 ) +

05 & *3* '

+ ( / ,

( " ) ( "*" *
( % + ) ( )
% ) ( 8 %
( " ( ( " +

06 ( = , 4 '
( 4) 4

' * * "( (
) " ( ( ( " "
( * + - " ( (
( ( " * ( "
) ( ( 8 "+
, ( ( (
( " ( ( %
% " ( % + ') ( ( (
1
• * "
" ( (
( * ( ( % * K
• ( ( (
% ( " %
" ( "K

9
 • ( " % H ( +I
* " "
" ( ( " * K
• A ? % % +
( * 8 ( ) 8
( ( " (
( ( ( ( +

5 '+ ( 3' + 1 )

50 % ' '+

( " ( *" &* ( " (

" ) ( *" % ( ! 9
6 ! 7+ 2@@0 % ( ! "
( % + ' % J "
( ! "* ( ) 1
• ' % J %( " % ( %
( % K
• % , 6( ( ( & 9 # & ( * (
( 7 % % % K
• & ( ( ( & (
( ( " % * " ( * "
, ( % K
• 9 & 6 7 % * ) (
( ( + ? (
( *" ) ( 2@@@+ ' %(
* ( ?( ( ) "
(+ (( % #( 23< ( %
( ( * ( ? (& (
( ( ( % + '
) ( ( % ) (
* ) +
• % ( %
H " ( *" ( &
( +I

10
' ") % ) (
( %( ( " # "
"& ( % + ,
* ( %( * ( ?( % (
( % ) ( %
& ( ( +
( % % % % (
) ./// 6 * <0@27+ ( * * * )
*5 % ( ( )
% ( ( + '
% " &* ( (
( ( ( * ) ( ? +
' ) ( ( %
" *" ( % )
( % + ' " ( "& * ("
" ( ) ( *
) ( " & ( * % * +
(( ( ( *" * ( % * )
( * ( ) !
% *" %( (( 8 ( " ( ( +
' % ! 6 ! 7 ( %
( ( ( % 1
• ' ( & (* K
• ' % ( " * ( K (
• ' %
* +
) J ( ( , 6 ,7 *
% J ( * ? % +
- ( ( & , - ( ) (
, ) * %( ) ( (
) ( + ' ,
% ) ( ( ( 6 (
, 5 ( * % ?( * 5 7 )
4< * % (
& % ? + L 3/ .//4 , %*
% ( 0// 6A!=2.+; 7) ( *" &
( 2+/; * + ' ( * ,
2@@0 % ( <* + ' "

11
 (& @<+4 ) , 2//
+

* 6 7 9 + B@00 6 %( L ".4 2@@27 8 * ( %

( ( ( ( (
( + * J
8 ( " ( * ( *" )+2 '
0" ( ( " ) * 8 " ( ( 2/ " *"
) ( 9 + B@00 9 + <.<@ 6) ) %( "B 2@@07+ 9+
<.<@ 8 ( ( B:
( ( .: ( ( +

( ( ( *( ( 9 + B@006 ( (7 ) *
) ) ) * 8 " (
" % 1
• $ %
$ ! &'( ) *++,-.
? ( ( ( ? % * ?
% ( "* ( ( 9 &
% " K
• " / %
$ ! &'(0) *+++- (
% ) ( %
K
• 1 2 " %
$ ! & ',+* - ? 8
( (
" ( * ( )
* K (
• 1 " 1 3 %
1 13 - %
$ ! & +*,' -
8 % ) ) ( )
( ( + A( (
( ( % " ) & )
6 ( 0207 ( B@00+
2@@@ % #( 6 #7 23< ) ( ( 1 67 ( (
( % % K 6 7
( & * ( K ( 6 7 %
6 , 7 % ( % " % + ' (
) ( 9 ! " ) (
% ( " & %
( % (%

1
(See Sec. X342.3 of the Manual of Regulations for Banks).

12
 "* ( ( + # 23< ) ) % ( *" #
;;< ( < .//B ) %% ( & ( ( * ("
+ % " ) ( " ( * ( ?(
( % ( # ;;< % & ( ( % "
() ( J ) +'
% " *" # ;<< " %(
(" ( ( *" % +

5 + >3 ) *

• #) + ' )
,J # * % ( 2@<0 8 " )
( 4/: * ) ( 2//: O O " ( "( (
% 6 7+ ' , %
2@@2 6, 7 * ?( % + "
./// ) 6 7 ((
% " ! 6 ! 7 ) ( 2//:
) ( (* +
• 8
• ( 8 " 8
• 6 + + 7
• 8
• ( 8
• ! ) % )
' % ( ( & "( % " (
( %( , %
( ( " * *
( " ( ! ( 8 "
( * " ( ( % (
( ( "
( % ( ( ( % (
" +
9 # ( ( 8 ( )
! ( 6! 7 & & ? +
9 # 8 ( ( ( (
! " *5 ( (
% *" " % " "+

13
' ) " " ( (
% % (
% ( , +

55 '? , ' 4 1 ) * ) 4

.//. 9 & % " 69 7 % () %

% %( "* ( ( ( ( % "+
"J ) ( ( )
* ) * ( % )1
• ' , * =;//+// ) (& +
* ( ( *" 9 % " ( ( +
• ' % (
( * ") ( (
* % =3 ///+// +
• ' ( * ) (
+ ) % , ( 9 !, ( + " %(
& ( +
• ' 9 % ( ! , ( %(
* ( ( ( + % ( *" (
+
• ' ! ( , 6! ,7 %(
) , +

6 , 3' + ' 4 , @$

60 '+

./// ! 6 ! 7 ( ( ) ( *
% " % + ' % (
% * 1
• $" 3 + * " ( " %
* + ') ( (
! ( * (
& ( * ( % !

14
 ( " ( * *
(G ( * 6 7 & (
* ( & (* * (
( ( ( & &
6 7 ( % ( (
+
• 4 " 5 1 "6 1 7 2 " +
./ * ( ( %
* ) %" ) * 2@; *
( * * ( % ( 9 #J+ ' !
( " ( ! *"
%( ) % ( ( +
) " ! %( *
) ! + (( ( '
* J % ) (
( + ' ! 8 ,J
+
• 8 " 9
" 1 : + % (
A % * ( ) ! " (
( 5 + ' %(
% ( ! J % + # (
A ( ( %
% ( (% "+
• + .//3 ! (
(% " ( *" " & (+
( "
* + '
* ( * % ) ( % (
* ( * ) +
• % ! ) 9 ( 69 7
( (" ( *
" ( ( * + ' 5 ) *
"* *" ( (
* ) ( ( ) (
" ( ( +

15
6 @$ A
* 3'

' ! ( ( *" ) % ( "

) * ( %
% ( 1
! 4/; H ( C ( E " (
? )&* ( (
* % ( *" ( +I
! 431 7' " ( (
* ) *" ( % ( ( * (
* ( " ( (
( +I
! 441 7 ( ( (
( ? ( 5 ( )
* ) ( ( ( ( ( *"* +I
( ! ( 23
( ( ? * %"
( * ( ) * + '
( " % 9 + <0@2 6 )7 *
% 9 + B@00 <4.; <43; ( @20<1
9 + .0.1 6( ( L " 3/ .//27 ( H
( * + + + ( ( ( )&
( ( * *
% ( % % ( ( +I %
) 1
• ( ( 2;//// 6 + A! 3 ///7
) 8 % ? (
! ( % " % 2@@0K
• "* ?( ( ") " *& " "
* ( ( 5 ( ) * ) K
• * ) % (
* ( % ( K
• ( ) ( ) 8 ( ( "
( ( ( +
8 ( % ( 8 " )* ( "
( * ( ( "
K ( ( (

16
 + F) % 8 ( *
( ( +
.031 6( ( ,* " .0 .//27 "
) ( * ( ) " ) &
( ( * + ./: (& )*
* ) ( *" ) + (( 5 "
* * ( ( % )
* % * + ;/:
* J + , " *
% ( 8 " +
.<. ( 3.41 %( 8 ( " ( *
( + * " 8 %
( " ( 1
• " ( ) ;// %
* ) K
• ( " ( ;: (
8 ( @;: K
• (& %( ( ( K (
• M" ( * ( ( (
+
34/ 3B; 3B@ ( ;/;1 %( (
* & ( * + & (
* & ( * * ( * )
" ( ( " "* * (
") " *5 ) 8 +
(( 8 * * & (
* (G & (* * ( 1
• ( " % ( *" * ( ( K
• ( 8 " K
• ' * * ( *" ) ( 8
% K (
• 0/: ( ( *" * *
8 ( * ) ( *
* ;/: +
3B41 6( ( L " @ .//37 ( ( 2//: 0;: )
* ! ( (
( ( +' ( 8 " 8
%( ( ( ( +

17
 3041 6( ( 32 .//37 %( (
" 6 7 .//.+ % ,
6 , 7 ( ( ) ( ( (
( "&* ( ? % 9 # (
J ? ( ( ( +
4/@1 6( ( # * 24 .//37 * (
( ( % * + & & 6 7
( ( H ( %
( ( "+ ' ( (
* * ( ( +I 8 ( )
** ( " ( ) *
( " ( " + % * ( @2 ( "
( " % ( "* ) +
( ( # * . .//.1 % ( * ( !
( G( ( +
( ( ' ( ( * 3/ .//31 8
(( ( (
* * J +
# L "2@ .//B " ( ) ( * " &
( ( + * 8 (
) ( 1
• ' ( ( ( * J
" % ( ( K
• ' ( * G K (
• ' & %
.
( " ) 5 " +
( % * " ! " % )
( ( ( " %
) ( +

65 $ 4 3' + >3 ) * ( *3 1* + *

' 9 ( 69 7 %( ", )
.//. ) % * 1GG)))+ + G + '
) % " ( * (G
* "* ( % ( *5 (

2
This is evaluated through a household cash flow analysis.

18
 ( % + ! 9 # ) ( (
* " " % ( *" ( +

1 ( " " ! ( (
+ ' ! " ( (
( * + " ( *
) * ) ( ) (
" +
' ( % ! (( " ) *
"+ ( " ? & (* (
* (( 8 )
+ 8 ( "
( ( *
)* H * (I + & ( ( * " (
( ( % )
* + ' * " ( * "
) 3 .//* % " ()
* =2+2 * % * ( ( % "%
( "&* ( +
* *5 & & (
% ( ( ( % @/ ( " *
( ) + ' % % 8 "
% ) ( ( ( (
8 +
' ! ? 8
( * % + ' * *" "
( +
% 1 ( % % %
"6 7+ ' ( ( % "
* ( ( ( &
( * + F) % J ( % % )
( ( *" ( ( % "
" ( % " ( + 2@@< 9 ( )
( % ( % ( ! ( ( 6! 7 )
( ( + * ( (
" + - J " (
% " ") ! +
9 & % # ? 69 # 71 9 # &(
( * 8 ( ) ! (

19
 6! 7 & & ? +
9 # " % 6 " (
* (& 7 + % ) !
%( ( ( % ( ( + '
6 7
* ( ( ( ) ( ( "
9 # ( ) ( + '
( ) ( * * % *" ( (
( ( 8 " " * "
( % + ' " ) ( ) ( (
( +

65 ( +@3 '
(

& % * ( ) ! + '
( ( *" " % ! % ( ! ) )
* " ( (% %( % (
! % + ' ! A #
) % ( ( * ("
% ( * +
* ( ( % ( *
( +
' ( "* ( ! ( ( * *
" ! + ' ! ( " (
! ( " 6 ( *
"7+ ! ( " % * (
) ( (" 6* " ( * (7
) ( ( +
' ! ( ( * ( "
* ( ( ( ( '
( ( *" ! ) ( " (
G % * + ! ( *
( ) (
% ( ( (
% * +

20
66 ) ( (1 +

' ! ( (% " ( *
%
"+ * ( * " (
! % ( +
# ( % !1 (
" % ) * * (
! ( % ( ( ( ( ( (
" (
* + ' ( ( (
%
" ( +
' % % ) % % 1
• % ) ( ( ( K
• ( ( ( (
% ( % ) K
• % ) ( K
• % ) % * ( K (
• % ) " " ( " ' *
+
- ! ( % ( *
(
( !) ( (

21
 =0

, % '@ / B ; <0C

• ! 4/ 43 ( 44
? 8 (
? ( ( ( +
• .0. & % ) ! 4/43
( 44 6/2G3/G/27
• .03 & ) (
* ( * ( % & ( *
6/.G.0G/27
• .<. & ( % ( "
$ * 6/4G2@G/27
• 3.4& % ( '
• 34/ & ( * * G
( * ( ( * G
(* 6/0G3/G/.7
• 3B;& * ? 2" * 8 6/2G2BG/37
• 3B@& * ? ? 8 ' 6/.G20G/37
• 4/@ & ( ( ( %
* " ( %
62/G24G/37
• ;/; " ( ( "
* G G% " G * ( *
( " ( * ( * 62.G..G/;7

1 ;
- (* * * ( ") "
- ) 8 .+; ) /+; 4 B

- % ( ( *
- )

22
 =

D '+ * , (3* +

0 ' ( ! 6 ! .//37
• B0/ ( ;4 % ) 2 </@* +
• 2.2 ( % ) 3
# ( +

% ! 6 .//47
• BB/// ( ) ";/: ( <;:
( G % +
• 2//! % G ( ) =. )
;/ % %( +

3+ 9 # ! 6 .//47
• 3////9 # () ! +
• B//9 # % %( +
• B* 9 # ( ) =3/
( +

23
$3 *

• L ! (" ! * % " ( +
9 %+ .//4
• F (* ! .//;
• - ( ! ( P *" ! "
( * + (
• ! ( ( "
9 ( ,
• % 1 ! !
I A9 9 , ( * .//3
• + * .//4
• 9 ) " , ".//;
• 1 ! ( "9 9+
.//4&2/ * + ! 9% * .//4
• ( ( ( (
( ( ' *
% # * .//;
• + 22
• ! 5 + +'

24