Monday, June 04, 2007

It won't happen

Much publicity has been given to the government's drive to have lending institutions do microfinance lending with the intent to encourage Filipinos to do business thereby stimulating the economy in the grassroots level. This would have been a blessing to so many Filipinos who would be more inclined to do business rather than doing the regular thing like finding a job in the corporate world. The funny thing is that many if not most of these "microfinance conduits" or lending institutions don't entertain borrowers with the intent to start a business. Among their usual requirements for a loan would be the business' past two-year financial statements or income tax returns. If such is the case, how on earth would anyone be encouraged to begin a business, even if it has a good future. So what's the point with microfinance then? I understand the concept of risk, I took Finance in college, but these lending institutions' over-cautious stance is no help to Filipinos. They need cheap loans and need them quick. If microfinance institutions can't do that, grassroots growth will be an unreachable dream indeed.

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