Posted on 09:22 PM, May 16, 2010 [ BusinessWorld Online ]
RURAL BANKS’ product template for small housing loans has been approved by the central bank, easing the process by which lenders can offer the product.
Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco, Jr. said the approval by the Monetary Board of the Rural Bankers Association of the Philippines’ (RBAP) product manual for housing microfinance loans means banks need not ask the central bank for approval before they can offer such loans to clients.
These banks, however, must be participants in the Microenterprise Access to Banking Services (MABS).
“If you are a member of RBAP and a MABS participant, you don’t have to seek a separate approval from the BSP... to be able to extend housing microfinance. You can simply use the product manual that has been approved,” Mr. Tetangco said.
“(This) facilitates the process so all RBAP-MABS banks can simply use the product manual that was presented to the Monetary Board,” Mr. Tetangco said.
MABS is a program funded by the United States Agency for International Development that assists RBAP in expanding member banks’ financial products and services.
BSP data showed there were 642 rural banks as of September, with 50 of these participating in the MABS program.
Under BSP Circular No. 678 issued last January that contains the rules and regulations for the approval and provision of housing microfinance, loans could go up to P300,000 for housing construction and P150,000 for re-pairs and improvements. Pay-ment terms are up to 15 years for construction and 5 years for improvement and repairs.
Tomas S. Gomez IV, RBAP spokesman, said the group applied for a product manual for housing microfinance as banks saw it as a “special type of product.”
“We saw the need to have a different manual for housing microfinance because it’s different,” he said in a phone interview.
“Microfinance has a loan ceiling of P150,000 but for housing microfinance, it’s P300,000. Repayment is usually a year but for housing, it could go over three years,” Mr. Gomez said.
“With the (approval), (housing microfinance) can now be rolled out by different rural banks,” he added. -- Jose Bimbo F. Santos