In all parts of the country, micro enterprises comprise the bulk of business enterprises in the country. The Department of Trade and Industry (DTI) estimates that, as of 2011, at least 99.6% of all businesses in the Philippines were classified as micro, small, and medium enterprises (MSMEs), while ” the remaining 0.4% were large enterprises. Of the total number of MSMEs, at least 91.0% were micro enterprises, with asset sizes not greater than Three Million Pesos (P3 million) and with up to 10 employees.

At their very core, micro enterprises enable poor families to undertake entrepreneurial activities to meet their minimum basic needs, including income generation. However, one major barrier for micro entrepreneurs is their lack of access to credit or capital. One way for them to access such funding is through micro finance.

“Micro finance”, as is defined in this bill, “refers to the provision of a broad range of financial services exclusively for the poor to improve the asset base of households and expand their access to savings and enable them to raise their income levels and living standards.” Therefore, micro finance is that much-needed first step between subsistence and sustainability, enabling the poor to startup businesses that can lift themselves out of poverty.

However, the micro finance sector has yet to be acknowledged by government as an integral partner in poverty alleviation. Moreover, the unique structure and purpose of micro finance institutions (MFls) have yet to be recognized as different from those of purely commercial enterprises.

Therefore, we are proposing a Microenterprise Development Strategy that is embodied in the Micro enterprise Institutions Development (“MicroDev”) Act. This measure seeks to provide an enabling policy environment and support for MicroDevs through appropriate tax reforms. It also aims to develop a social reform program that will empower the poor, aid them in managing financial risks, and, in doing so, expand access to micro finance services, such as: microcredit, microsavings, health care, and others. This Act also opens up access to a broad range of financial, business, and other human development services. The ultimate goal of the MicroDev Act is to lift people out of poverty and enable them to live more productive, self-sufficient lives.

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