While it aggressively pursues abusive loan sharks, the government must also strengthen the country’s microfinance institutions (MFI) to help address the financing needs of the poor, according to Sen. Bam Aquino.

“As author of the Microfinance NGOs Act, we are supportive of eradicating 5-6 in the Philippines,” said Sen. Bam, referring to Republic Act 10693, which he pushed as co-author and principal sponsor during his term as chairman of Committee on Trade, Commerce and Entrepreneurship in the 16th Congress.

 The senator pointed out there are better alternatives to 5-6, like MFIs NGOs that provide alternative low-interest, no-collateral financing to the poor and would-be entrepreneurs who need loan to start their own business.

 “There are better alternatives to 5-6, whether these are government programs, or led by the private sector. Mas magandang masuportahan ang mga grupo at programang ito na regulated ng goberyno na makapagbibigay rin ng pautang na hindi kasintaas ng mga 5-6 ang interes,” he added.

 Sen. Bam called on the BIR to finalize tax regulation for MFI-NGOs for the law to be fully implemented and fulfill its mandate to give the poor low-interest financing.

 Microfinance NGOs provide Filipinos access to low-interest, no collateral loans to pay for housing, medical, and educational needs as well as loans for small businesses.

 Republic Act 10693 gives incentives to microfinance NGOs to continue helping Filipinos overcome poverty not just through financing but also through financial literacy, livelihood, and entrepreneurship training.

The law also provides microfinance NGOs needed support and incentives that includes access to government programs and projects, technical assistance and exemption from taxes.

 “MFI NGOs aid our poor countrymen in times of inflation and price increases. They also provide financing and training for livelihood and small businesses so families can overcome poverty,” he said.

 In 2013, MFI NGO members of the Microfinance Council of the Philippines, Inc. (MCPI) had a gross loan portfolio of over 15.26 billion pesos catering to more than 2.7 million micro-entrepreneurs.

 At the same time, Sen. Bam called on concerned government agencies to expedite the release of the implementing rules and regulations for Republic Act 10744 or the Credit Surety Fund Act.

 Aquino, author and sponsor of the measure’s Senate version, said it will institutionalize the CSF program of the Bangko Sentral ng Pilipinas (BSP), which addresses loan requirements ranging from P200,000 to P5 million.