MFIs grant loan moratorium to 9 million clients

Microfinance institutions (MFIs) in the Philippines are implementing a loan payment moratorium for their nine million microentrepreneur clients in response to the COVID-19 crisis and the resulting enhanced community quarantine.

The Microfinance Council of the Philippines (MCPI) and the Alliance of Philippine Partners in Enterprise Development (APPEND) recognized that microentrepreneurs are particularly vulnerable to the economic fallout of the pandemic, with disrupted businesses and income loss.

This moratorium will exempt borrowers from making loan payments, penalties, or fines for the duration of the lockdown in Luzon and other affected regions.

In addition to suspending operations, MFIs will continue to monitor the social and health needs of their clients and ensure the payment of salaries for their 50,000 employees.

MCPI and APPEND are also collaborating on proposals to seek financial support from the government for both immediate and long-term relief.

As of mid-2019, outstanding microfinance loans from banks amounted to P23.9 billion, representing a significant year-on-year increase.