MICROFINANCE-policies

Question 1

In the Philippines, it was noted that _______ was a failure in promoting effective and sustainable rural financial markets which led to question whether the government’s scarce resources can be utilized more effectively and efficiently through other strategies or mechanisms for rural income expansion and poverty reduction

Answer 1

1. directed credit

Question 2

The experience of _____, ______, ______ and _______was worth noting, as these economies experienced unprecedented growth following the shift towards ________ such as __________.

Answer 2

1. Taiwan
2. South Korea
3. Hongkong
4. Singapore
5. market-based policies
6. interest rate liberalization

Question 3

Such liberalization move allowed greater freedom of entry into the ________ which increased the number and competitiveness of banks and other types of financial institutions serving the basic sector such NGOs and cooperatives.

Answer 3

1. financial market

Question 4

The disappointing result from the ________prompted government to shift to a ________ in financial market.

Answer 4

1. subsidized credit programs
2. market-oriented regime

Question 5

Thus, major changes took place – __________ in the Central Bank were removed , __________ were liberalized and termination of _________ by some government agencies implementing credit programs in the agriculture.

Answer 5

1. concessionary rediscount lines
2. interest rate policies
3. direct lending

Question 6

Previously, the rediscount window was used by the Central Bank to direct the flow of credit through banks to priority sectors by giving these sectors ___________ which could be as low as ______- and a _________ which could be as high as _______. This policy was changed in ______ when the ______ started setting one rediscounting value equivalent to ______ of the value of the ______ and one rediscount rate for all eligible papers which was aligned with the market rate beginning in that year

Answer 6

1. preferential rediscount rates
2. 1.0 percent
3. rediscounting value
4. 100 percent
5. 1985
6. Central Bank
7. 80 percent
8. original loans

Question 7

Concerned about the basic (poor) sector not being able to access financial services and private financial institutions being averse to serve the financial needs of the poor, a broad alliance of government, non-government, and people’s organizations established the _______ on _______.

Answer 7

1. Social Pact on Credit
2. October 8, 1993

Question 8

The Pact called for _______ of ______________ to make them more accessible by the basic sector.

Answer 8

1. rationalization
2. credit programs and policies

Question 9

What pact became a component of the broader Social Reform Agenda which was the government’s main blueprint to address poverty.

Answer 9

Social Pact on Credit

Question 10

Even if there were already reforms initiated in the past, there was no comprehensive policy framework on credit programs at the same time an institutional champion to take the driver’s seat of the reform process and monitor implementation . Thus, the ______ was created in ______

Answer 10

1. NCC
2. 1993

Question 11

the_____ was created to provide the government an instrument for leading and managing the credit policy reform process.

Answer 11

NCC

Question 12

The ______ is a multi-sectoral policy body created in 1993 through Administrative Order No. 86 to meet the need to ______. It is chaired by the Department of Finance (DOF), with Landbank of the Philippines as Vice-Chair. Its membership is composed of the stakeholders in credit policy and delivery.

Answer 12

1. NCC
2. rationalize credit policy

Question 13

The NCC has the following functions:

Answer 13

a. Rationalize and optimize, on a sound basis, the use and delivery of the various credit programs of all government institutions in order to harmonize, and where deemed necessary by the Council, consolidate activities through regular lending transactions, taking into consideration such parameters as clientele and local area characteristics, interest rate policy, delivery mechanism, mobilization proves, and fund sourcing;
b. Develop, through multi-sectoral consultations/linkages and policy dialogues, a national credit delivery system, incorporating the attendant capability upgrading and institutional strengthening mechanisms toward enhancing the credit beneficiary groups’ productive capability and the financial intermediaries’ efficiency and effectivity;
c. Encourage a higher level of private sector participation , with its extensive network of commercial banks whose combined resources are far greater than that of government, in the credit delivery of countryside small and medium enterprises and rural entrepreneurs to spur countryside development and the creation of work places with small per capita investments as well as the setting up of rural infrastructure and other economic projects;
d. Define and rationalize the role of guarantee programs and guarantee agencies. Review the adequacy of guarantee funds and coverage with the goal of undertaking the necessary adjustments thereto.

Question 14

Originally, the ______ acted as the Secretariat of the NCC. The Secretariat was later transferred to the DOF to avoid any conflict of interest that may arise from LBP’s active involvement in delivery of credit programs.

Answer 14

1. LBP

Question 15

In 1997, the NCC, in consultation with various stakeholders, drafted and issued the __________ which outlines the vision and strategies for developing the country’s microfinance market.

Answer 15

National Strategy for Microfinance

Question 16

What is the vision of National Strategy for Microfinance

Answer 16

The vision is to have a viable and sustainable micro financial market in a market-oriented and liberalized economy.

Question 17

The National Strategy for Microfinance has four salient features:

Answer 17

1. Provision of an enabling policy environment through the appropriate policy and institutional framework to facilitate increased participation of the private sector;
2. Adoption of market-oriented financial and credit policies such as market-oriented interest rates on loans and deposits;
3. Non-participation of government line agencies in the implementation of credit and guarantee programs. Instead, these line agencies shall focus on providing infrastructure and capacity-building; and
4. Greater role of the private sector particularly private financial institutions in the delivery of financial services to the poor

Question 18

The ____________embodies new paradigm, veering away from directed or subsidized credit policy that was government-driven to a private-sector-driven market.

Answer 18

National Strategy for Microfinance

Question 19

National Strategy for Microfinance defines the _________ as the provider of appropriate and enabling policy and regulatory directions. On the other hand, donors can best optimize utilization of its assistance primarily by way of _____________.

Answer 19

1. government’s role
2. capacity building activities

Question 20

The development of microfinance as a government policy called for either _______of certain laws or creation of new ones

Answer 20

1. amendment
   2.

Question 21

One of the challenges faced by the government, particularly the NCC which has been in the forefront of microfinance policy reforms, has always been the ____________ that require the enactment of laws that would be the basis for implementing the _________.

Answer 21

1. pursuit of reforms and policies
2. National Strategy

Question 22

the ______- and ________by NCC was adopted and incorporated into the credit provisions of the _________- and ______ passed in December 1997.

Answer 22

1. market-based financial
2. credit policies advocated
3. Social Reform and Poverty Alleviation Act
4. Agriculture and Fisheries Modernization Act

Question 23

Thus, ________ became an important activity for the NCC to win support for its policy reforms.

Answer 23

policy advocacy

Question 24

Three important features of Social Reform and Poverty Alleviation Act Agriculture and Fisheries Modernization Act are:

Answer 24

1. the phase out of DCPs,
2. the designation of GFIs as wholesaler of funds and
3. the creation of the People’s Credit and Finance Corporation as the forerunner of wholesale credit funds as well as the establishment of People’s Development Trust Fund (PDTF)

Question 25

a fund for capability building of MFIs and their clients.

Answer 25

People’s Development Trust Fund (PDTF) –

Question 26

The _______ is essentially a questionnaire and guide that helps an MFI evaluate its intentions, actions and corrective measures implemented, rather than transformations in clients.

Answer 26

CERISE tool

Question 27

The CERISE tool examines four dimensions of social performance:

Answer 27

(1) outreach to the poor and excluded populations, (2) adaptation of products and services to target clients, (3) improving social and political capital, and (4) corporate social responsibility.

Question 28

The _________ combines a set of social performance indicators (a scorecard) at the level of the organization and a social audit to evaluate the social performance of MFIs. It is based on information on organizational processes rather than client outcomes and impacts.

Answer 28

SPA tool