what do you think the major impact of micro-financing cooperative to the economies of the philippines?

Question

does the micro-financing cooperative helpful to the filipinos? one of the micro-finance in the philippines is the PALFSI manage by the priest and sisters in the province of sorsogon wherein every diocese has this cooperative. i want to know the impact of this cooperative to the member as well as to the community? the benefits and priveleges given by this cooperative.

Answer 1

Well you mention microfinance cooperatives. They can meet certain needs but have often limited resources so the scope of their project is modest (although useful!)

Yes indeed by providing credit but maybe other financial services they can support member of communities and perhaps other economic actors, that can create a real added value. There is no such 'privileges' but to be eligible to those services.

Keep in mind that there are other microfinance actors, from small group lending to big banks. The sector is well diversified and countries like the neighbour Indonesia are already well developed. In this case, I would say that the there is a real impact on the economy of the country.

The impact is that they will stimulate economic growth that would otherwise not occur. Credits and savings are really important for all economic activities.

See links below for info that you might find interesting.

Hope this helps.

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to Super Noypi: yes but remember that microfinance institutions focus on EXISTING microentreprises so it is rare that they support the creation of new activities.

Answer 2

Micro-Financing can be of great help to Filipinos. Most families, especially those in the rural areas, don't have land of their own to toil. They earn little by working for people with farm during harvest time only which is just a few days in a year. With the micro-finance, they will be given the chance to open/create their own livelihood even without collateral and paying lower interest. Usurers abound in this country you know. But this financing should also be supported by technical assistance on their chosen livelihood. Rural people are usually under-educated.

The drawback though is that the rural area is usually dependent on agriculture. So when natural calamities strike, the farm produce will be damaged. That means money lost. It's the money that should have been used to buy whatever products being offered by those with non-agricultural livelihood. That means No Transaction=No Money. No money to repay whatever loan they got from the cooperative. Making the cooperative bankrupt and the effort useless.