Manila, May 26, 2006 AEST (ABN Newswire) - Asian Development Bank (ASX: ATB) and the Government of the Philippines today signed an agreement for a US$900,000 grant project to help develop a sustainable microfinance industry in the country.
Financed by the Japan Fund for Poverty Reduction (JFPR), from the Government of Japan, the project will support the development of financial cooperatives engaged in credit and savings operations, and strengthen the Cooperative Development Authority (CDA), which oversees the cooperative sector.
Signing for ADB was Thomas Crouch, Country Director of its Philippine Country Office, while Finance Secretary Gary Teves signed on behalf of the Government. Satoshi Ikeda, representing the Embassy of Japan in Manila, was also present at the signing ceremony.
"Improved access to efficient microfinance services can help the poor smooth their consumption, manage their risk better, and build assets," says Eiichi Sasaki, an ADB Financial Sector Specialist.
"The challenge is how to provide access to sustainable microfinance services for the more than 3 million households in the Philippines that currently do not have access."
As a major part of the Philippine microfinance sector, financial cooperatives engaged in savings and credit operations need to develop sound financial operations for their poor clients.
The project will help improve the performance of financial cooperatives by strengthening their compliance with CDA's regulatory requirements, and support CDA's institutional strengthening.
"In this manner, the project aims to promote the healthy development of the microfinance industry in the Philippines to increase household incomes and reduce poverty and the vulnerability of the poor to shocks," adds Mr. Sasaki.
The project complements ADB's $150 million Microfinance Development Program for the Philippines, approved in October 2005, which focuses on building viable microfinance institutions and strengthening regulatory capacity for a sound microfinance sector.
The Government and beneficiary cooperatives will contribute the balance needed to meet the total project cost of $1.12 million. The National Credit Council, an inter-agency body chaired by the Department of Finance, is the executing agency for the project, which will be carried out over four years.
JFPR was set up in 2000 with an initial contribution of Y10 billion (about $90 million), followed by additional contributions of $155 million and a commitment of $50 million.
Contact
Rita Festin
Email: rfestin@adb.org
Tel:+ 632 683 1006; + 63917 8884949
Graham Dwyer
Email: gdwyer@adb.org
Tel:+632 632 5253; +632 898 3413; +63 915 741 4363
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