Basics of Microfinance
This is the provision of access to financial products and services to low-income groups.
Microfinance
What does SEDPI stand for?
Social Enterprise Development Partnerships, Inc.
These enterprises are the first to receive detrimental effects of COVID-19.
Microenterprises
This is the most used coping mechanism of the poor during emergencies.
Loans
These two financial products are best used during emergencies.
Savings and Insurance
Give an example of microfinance clients from both rural and urban areas.
In rural areas, they are usually small farmers and fisherfolk as well as others who are engaged in small income-generating activities such as food processing and petty trade.
In urban areas, microfinance activities are more diverse and include shopkeepers, service providers, artisans, street vendors, and others.
Microenterprises are defined to have less than this number of employees with assets of this number and below.
Less than 10 employees with assets of 3 million and below.
Having insurance and savings are a must to secure financial stability, however, some Filipinos do not have insurance or adequate savings and it is primarily because of this.
Lack of money
This enterprise is known as the smallest business or means of livelihood in the Philippines.
Nano-Enterprises
Microfinance services can be inclusive if they put an emphasis to this, which is the need to understand consumer behavior and how it influences financial service needs and use.
Focus on Clients
In April 2020, the International Labour Organization estimated this number of informal workers across the global south which could see their livelihoods destroyed due to the pandemic.
1.6 billion
It is this generation that is more attuned towards consumption and are the drivers of our economy.
Millennials
This kind of finance aims to improve the range, quality, and availability of financial services to the underserved and the financially excluded.
Inclusive Finance
The gap between those with and without internet which leads to unequal access to social services and life-changing economic opportunities such as in the case of the Philippines.
Digital Divide
In a position paper made by Sir Vince Rapisura and his peers, this was recommended to not be approved during this time of pandemic as the poor will bear the cost while the middle class earns money.
Interest accrual of loans
To have an adequate amount of emergency savings, one should have this number of months worth of savings of this number of months worth of expenses.
6 months worth of savings; 9 months worth of expenses
Give all the principles of microfinance.
Insurance and savings are more important than loans.
Offer financial services that fit the preferences of low-income households.
Streamline operations to reduce costs.
Motivate clients for repayments.
Fair product pricing that ensures financial sustainability.
Microfinance is growing because there are more financial products available due to experimentation and innovation. These two approaches solve the problem of lack of collateral for microcredit.
Group and Character-based Approaches
Provide a recommendation to help microenterprises in this time of the pandemic.
Government should work closely with microfinance institutions.
Intensify the relief operations and provide cash assistance.
From what you learned in the module, give three examples of spending patterns or habits of millennials.
Buy experiences such as travelling
Buy from companies with social responsibility
Forming relationships with brands