This month’s Passport Series is all about the Philippines! The Philippines is truly a cultural melting pot, a quality that is reflected in its many languages, vibrant celebrations and its food! Follow us throughout the month of December as we learn about The Philippines as a nation, its microfinance sector, and the work that Kiva does there!

Microfinance Sector in the Philippines


The microfinance sector in the Philippines has grown extensively over the past ten to fifteen years. According to Microfinance Information Exchange (MIX), in 1996 there were two microfinance institutions (MFIs) operating in the country compared to ninety-three today. The total loan portfolio in 2010 was slightly more than USD $630 million with about three million active borrowers. That translates to an average loan amount of just over USD $200.00 per borrower. There are also about 3.7 million depositors in the country with over USD $450 million currently being saved. In comparison, the most populous country in the region, Indonesia, has a population about 2.5 times greater than the Philippines yet only about 410,000 active borrowers and a total loan portfolio of about USD $275 million. Vietnam, with a similar population as the Philippines, has a total loan portfolio of USD $4.7 billion with about 8.5 million active borrowers.


Microfinance in Mindanao

Mindanoa is the most southern of the three Filipino regions, with a year-round tropical climate and beautiful beaches. It also has a long, almost five-hundred year history of conflict dating back to the Moro Wars starting in 1578. In recent years turmoil and conflict have continued within the region as four separatist groups contend with the Filipino government. In 1996 the Moro National Liberation Front (MNLF) (one of the four main separatist groups) signed an agreement with the Filipino government that gave the predominantly Muslim area a degree of self-rule, setting up the Autonomous Region in Muslim Mindanao (ARMM). While the creation of the ARMM was considered a victory for the separatists the region has continued to see skirmishes and kidnappings related to political and religious objectives.1

This tumultuous environment has made practicing microfinance in the region somewhat challenging. However, despite the difficulties and higher cost of serving this area several organizations have made it a point to continue to do business within the ARMM region providing financial access to some of the most under-served populations in the country. Two prominent microfinance networks in the Philippines, the Microfinance Council of the Philippines and the Mindanao Microfinance Council are working with MFIs to ensure Mindanao residents have access to a full range of microfinance services. Currently there are eleven MFIs working in Mindanao, five of which are Kiva Field Partners. The networks are working to bring more capital to the area by encouraging the participation of larger organizations that are better positioned to absorb possible losses as well as partnering with international groups such as Kiva and the Japanese International Cooperation Agency (JICA).2

While Mindanao continues to be a volatile region, making microfinance more difficult and more expensive to provide, MFIs and cooperative networks are working hard to bring opportunity and stability to the area. As Ruben de Lara, president of the Microfinance Council of the Philippines, says, “The poor will always remain poor as long as their needs are not met. They need all the support they could get”.2

Kiva Field Partners in the Philippines

Kiva currently partners with seven MFIs in the Philippines all of which offer an array of credit as well as nonfinancial services.

Negros Women for Tomorrow Foundation, Inc. (NWTF) was founded in 1984 and began as a non-governmental organization that aims to help women achieve self-sufficiency and self-reliance, particularly in Negros Occidental’s low-income and depressed urban and rural communities. It sought to increase women’s awareness of their economic potential, to increase their skills and productivity and to improve their quality of life. NWTF has earned five social performance badges for the work they do in addition to the credit products they offer their clients. The they have earned are: Anti-Poverty Focus, Family and Community Empowerment, Entrepreneurial Services, Facilitation of Savings, and Innovation.

An NWTF borrower - Photo Credit: NWTF

Community Economic Ventures, Inc. (CEVI) started as a micro-enterprise development program that aims to offer more dynamic and sustainable projects to its clients. In 2000, CEVI was registered as a non-stock, non-profit, non-governmental organization (NGO). Since its inception over 10 years ago, CEVI has established microfinance services in 12 provinces and cities across the Philippines, for a total of 26 branches. CEVI continues to explore methods to increase outreach to people in impoverished regions, including communities that have been financially excluded based on ethnicity and religion. CEVI recently earned three social performance badges including Anti-Poverty Focus, Entrepreneurial Support and Facilitation of Savings.

Alalay sa Kaunlaran, Inc. (ASKI), was established in October 1986 to help combat issues like poverty and unemployment. Kiva chose to work with ASKI because they reach clients who have no previous formal credit history and no savings accounts. Even though their clients are involved in productive activities, many live in poverty and some live in extreme poverty due to exclusion from financial services. Small farmers in particular are vulnerable to these circumstances. ASKI has earned three social performance badges including Client Voice, Entrepreneurial Support and Innovation.

An ASKI borrower - Photo Credit: ASKI

Founded in 2004, the Center for Community Transformation Savings and Credit Cooperative (CCT) is dedicated to transforming the lives and communities by providing services to the poor through a holistic development approach. CCT reaches micro-entrepreneurs, service workers, itinerant vendors, orphans, indigenous peoples, landless agricultural workers, fishermen and women and abandoned children in urban poor communities. In addition, the Center for Community Transformation operates training and development programs, clinics and disaster relief operations. CCT also runs a generic pharmaceutical distribution business called Tindahan Para Sa Bayan which allows micro entrepreneurs to access low cost medicine while funneling any extra income to social service projects. CCT has earned five social performance badges for the work they do including Anti-Poverty Focus, Vulnerable Groups Focus, Client Voice, Family and Community Empowerment and Facilitation of Savings.

Gata Daku Multi-Purpose Cooperative (GDMPC) was formed in March 1992 and registered with the Cooperative Development Authority on August 13, 1992. Being a cooperative, GDMPC engages borrowers in decision-making, representation, and profit sharing. Two poverty focused programs support the majority of GDMPC’s clients, which are the rural, poor, and women. Kiva’s support enables GDMPC to reach these clients in a country where rural poverty is all too common. GDMPC has earned the Client Voice, Entrepreneurial Services, Facilitation of Savings, and Innovation social performance badges for the great work they continue to do.

Hagdan sa Pag-uswag Foundation, Inc. (HSPFI) is a non-stock, non-government organization established on September 7, 1987. HSPFI is a development organization offering microfinance services as well as capacity building, community development and transformation. With eight branches spread out over the provinces of the northern part of Mindanao, HSPFI offers a mandatory savings program, insurance programs, and leadership/business trainings to their clients. HSPFI has earned two social performance badges for Entrepreneurial Support and Innovation.

An HSPFI borrower - Photo Credit: HSPFI

Paglaum Multi-Purpose Cooperative (PMPC) was organized in February 1992. Because PMPC is a cooperative, each member can contribute savings, take loans and earn profits as the institution increases its reach and profitability. PMPC is serving largely the rural poor in the Philippines, including the Subanon tribe—one of the few remaining indigenous peoples. Further, PMPC also provides micro-insurance, off-grid solar power, rice harvesting services and sponsors a children’s savings plan, as well as preschool-through-college education for the children of indigent families. PMPC has earned six social performance badges for Anti-Poverty Focus, Client Voice, Family and Community Empowerment, Entrepreneurial Services, Facilitation of Savings, and Innovation.


Click on Field Partner to help make a loan to a borrower in the Philippines!

Stay tuned for Part 3 of our Passport Series to read about the work that Kiva is doing in the Philippines.

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