Microfinance NGO Regulatory Council

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Microfinance Non-Government Organizations (NGO)

A Microfinance Non-Government Organization (“MF-NGO”) is a non-stock, non-profit organization duly registered with the Securities and Exchange Commission (SEC) with the primary purpose of implementing a microenterprise development strategy and providing microfinance programs, products and services such as microcredit and microsavings for the poor and low-income clients.

[Section 3. (h) of Republic Act (RA) No. 10693 or the Microfinance NGOs Act and Rule 2 (s) of its Implementing Rules and Regulations (IRR)]

MF-NGOs shall have the following features and purposes:

Provide the poor direct access to reasonable and affordable credit and related, programs and services which shall include, but shall not be limited to, microfinance, microinsurance, microenterprise development, health care, and micro-housing, subject to existing laws and regulations;
Provide business development opportunities such as leadership training and entrepreneurial skills enhancement;
Provide human development services to help the poor achieve a level of sustainability and empowerment, and adopts measures to promote a spirit of generosity and selfless giving among individuals and institutions that shall help support programs directly involved in poverty eradication;
Collect compulsory savings or Capital Build-Up (CBU) only from their clients for purposes of maintaining the compensating balance in relation to the same client’s loan. Acceptance of client savings for this purpose shall not cause the MF-NGO to be deemed engaged in deposit-taking operations;
Prohibited from directly engaging in the insurance business. However, they may establish partnerships with authorized microinsurance agents and/or entities in the furtherance of their social protection
Charge reasonable interest and collect such necessary fees and charges incidental to its microfinance operations;
Borrow money or incur such obligations for the purpose of re-lending to microfinance borrowers, subject to existing laws: Provided, that a MF-NGO shall not be deemed as engaged in quasi-banking activities if the proceeds of the borrowings are exclusively used for relending to microfinance borrowers;
Accept donations or grants or contributions in accordance with existing laws and regulations;
Invest their funds in sound, non-speculative enterprises and instruments, subject to rules and regulations of the relevant government regulatory agency;
Maintain a transparent and comprehensive management information system; and
Publish and disclose audited accounts at the end of every financial year.

(Section 6. of RA No. 10693)

MF-NGOs shall continuously provide at least any of the following programs, products, or services:

Microcredit and financial literacy programs; and
Microcredit and CBU or microsavings.

(Section 7 of RA No. 10693 and Rule 5, Section 1 of its IRR)

The following are the other programs and services that MF-NGOs may undertake, subject to existing laws and regulations:

Agricultural microfinance;
Housing microfinance;
Microinsurance, in partnership with authorized microinsurance companies, agents and/or entities;
Electronic payment system such as mobile or any innovative digital platforms or channels;
Money transfer and other related remittance services, in partnership with authorized agents and/or entities;
Provide development opportunities such as leadership training and entrepreneurial skills enhancement; and
Other relevant and/or innovative programs, products and services that address social welfare purposes and which are not contrary to existing laws and regulations. This may include, but not limited to, programs involving health, education, Disaster Risk Reduction and Management (DRRM), and Persons with Disabilities (PWD) assistance.

The Council may require the submission of the necessary licenses/documents proving that the MF-NGO is allowed to engage in the foregoing activities.

(Section 8 of RA No. 10693 and Rule 5, Section 1 of its IRR)