Microfinance Country Information

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Negros Women for Tomorrow Foundation (NWTF) was one of the first MFIs to start using the Grameen Foundation progress Out of Poverty Index (PPI), a monitoring tool which provides data on client poverty status in relation to the international poverty line using a five-minute interview. Field staff gather PPI data through a standard survey form, upon entry of clients and every loan cycle thereafter. Whilst the PPI has been designed to be used on the sample of clients, NWTF has decided to capture data from all clients in the MIS for use in detailed segmentation and analysis. NWTF has plans to link PPI data with other client-level information (such as repayment, age, or type of business) in order to allow the MFI to conduct loan evaluations, monitoring, and programme review. Importantly, when analysed in combination with financial statistics, this will allow NWTF to highlight areas for product changes or additional services that cater to the specific needs of very poor clients.
Source: Soundbites - Imp-Act Consortium

Statistics on Informal/Traditional Credit Markets

Shares of Formal and Informal Credit in the Rural Sector (1978):
Formal Sources: 32.0 %
Informal Sources: 68.0 %

Money Lenders (0.6%); Semi-professional Money Lenders (79.5%); Friends and Relatives (32.5%)

Source: Technical Board for Agriculture Credit, A Study on the Informal Rural Financial Markets in Three Selected Provinces of the Philipines, 1981.

> Of the total value of loans to rural population, informal sector provided: 60% of credit in 50s and 60s; 30% in 70s and 78% in late 70s. Less than 10% of small and medium scale businesses received formal finance. Informal money lenders covered 70% of farmers' credit needs: 29% of total number of loans came from friends and relatives; 6% of total loan value provided by landlords (1982); 75% of total credit to agricultural sector from traders, millers, dealers, big farmers.
Germidis et al. (1991)

Share of Informal Credit in the Philippines
(per cent)
                                                   All          Rural           Urban

1. Proportion of Households/ adult individuals who borrowed from: - either/both sectors 35 36 - formal sector n.a. n.a. - informal sector n.a. n.a. 2. Proportion of borrowing households/adult individuals who borrowed from: - formal sector 28 48 - informal sector 66 45 - both sectors 6 7 3. Proportion of borrowings from: - informal sector 59 70 - formal sector 34 23 4. Proportion of outstanding household debt owed to informal sector 23

Ghate, 1990

Hari Srinivas - hsrinivas@gdrc.org
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