Microenterprise Access to Banking Services
Encyclopedia
The Microenterprise Access to Banking Services (MABS) Program is an initiative designed to accelerate national economic transformation by encouraging the Philippine
rural banking industry to significantly expand microenterprise access to microfinance
services. To do so, the MABS Program assists client rural banks in the Philippines to increase the financial services they provide to the microenterprise sector by providing microfinance technical assistance and training to rural banks. Trained bank
s in turn offer microfinance loan and deposit services specially tailored to microenterprise clients.
Since its inception in 1998, the MABS Program has worked directly with over 100 rural banks to develop and expand their microfinance services in the Philippines.
Significantly, there are over 750 rural and cooperative
rural banks covering over 85% of the municipalities and cities of the Philippines. These banks are culturally and geographically close to the potential clients that comprise the microenterprise sector. It has been shown that limited access to financial services
constrains economic growth
in the Philippines. This is especially true for lower socio-economic groups, which must turn to moneylender
s, pawn shops or lending investors for credit instead of formal institutions. MABS targets these lower socio-economic groups and microentrepreneurs by working with rural banks to reach such groups in a profitable, but equitable, manner.
The Program is funded by the U.S. Agency for International Development (USAID), and is being implemented in partnership with the Rural Bankers Association of the Philippines (RBAP). Philippine government oversight of the Program is provided by the Mindanao Economic Development Council (MEDCo).
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Philippines
The Philippines , officially known as the Republic of the Philippines , is a country in Southeast Asia in the western Pacific Ocean. To its north across the Luzon Strait lies Taiwan. West across the South China Sea sits Vietnam...
rural banking industry to significantly expand microenterprise access to microfinance
Microfinance
Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services....
services. To do so, the MABS Program assists client rural banks in the Philippines to increase the financial services they provide to the microenterprise sector by providing microfinance technical assistance and training to rural banks. Trained bank
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
s in turn offer microfinance loan and deposit services specially tailored to microenterprise clients.
Since its inception in 1998, the MABS Program has worked directly with over 100 rural banks to develop and expand their microfinance services in the Philippines.
Significantly, there are over 750 rural and cooperative
Cooperative banking
Cooperative banking is retail and commercial banking organized on a cooperative basis. Cooperative banking institutions take deposits and lend money in most parts of the world....
rural banks covering over 85% of the municipalities and cities of the Philippines. These banks are culturally and geographically close to the potential clients that comprise the microenterprise sector. It has been shown that limited access to financial services
Financial services
Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are credit unions, banks, credit card companies, insurance companies, consumer finance companies,...
constrains economic growth
Economic growth
In economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...
in the Philippines. This is especially true for lower socio-economic groups, which must turn to moneylender
Moneylender
A moneylender is a person or group who offers small personal loans at high rates of interest.-See also:* Microfinance - provision of financial services to low-income individuals....
s, pawn shops or lending investors for credit instead of formal institutions. MABS targets these lower socio-economic groups and microentrepreneurs by working with rural banks to reach such groups in a profitable, but equitable, manner.
The Program is funded by the U.S. Agency for International Development (USAID), and is being implemented in partnership with the Rural Bankers Association of the Philippines (RBAP). Philippine government oversight of the Program is provided by the Mindanao Economic Development Council (MEDCo).
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