Micro-financing in the Philippines
A lot of low-income earners worry about having limited or no access to credit, insurance, savings, and other fiscal services. As most financial institutions do not cater to low-income clients, underprivileged individuals usually encounter difficulty in looking for sponsors to help them take advantage of investment opportunities; to obtain sufficient funds needed in times of personal emergencies (disease and injury) and fortuitous events (floods and typhoons); and most importantly, to generate income. In the Philippines, a considerable number of financial institutions and private individuals, along with the non-government agencies, have felt the need to address the lack of financial service support to the deprived of the Philippine population. Thanks to micro-financing, it is now possible for low-income earners to have a well-founded access to loans.
During the earlier years, underprivileged individuals mainly rely on naturalized Indians to lend them funds even at 5-6 loan schemes, where the interest rate is fixed at 20 percent. Aside from the quick release of cash, many Filipinos actually prefer this lending style because these lenders do not require collateral and other relevant papers. Luckily, rural banks and other financial institutions now offer micro-financing to Filipinos with an interest rate of as low as five percent. This low interest rate, along with the availability of flexible savings services and reasonable insurance plans, allows every underprivileged person to find solutions to any aspect of their financing needs.
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