The Effects of Microfinance on Individuals, their Families,

Communities and on the Country

People can obtain acceptable small business loans through microfinance in a secure
manner that adheres to moral lending principles. Most significantly, it offers each person a
feeling of control and transforms their life by providing them with the benefits of higher
incomes to accumulate assets and enhance their living arrangements, consumption patterns,
and health. With all those advantages, they can create a modest company that they can
expand over time. After all, microfinance is frequently seen as a tool for empowering women
by raising their socioeconomic standing and psychosocial well-being.

It aids low-income families in balancing their income fluctuations and setting up

money for upcoming needs. For the children, starting a small business also acts as their main
training ground, giving them a foundation in case they decide to venture into business for
themselves in the future. Microfinance helps families and small businesses thrive in
prosperous times and can assist them in coping and rebuilding during difficult times.

Microfinance is a significant instrument for reducing poverty in both emerging and

established countries since it generates income and develops jobs for the poorer elements of
society, promoting social well-being. According to the video, the majority of local business
employees are also a part of the community, which greatly aids the area in reducing the
number of unemployed people who are unable to find employment because of high
qualifications but the salary is below minimum.

These microenterprises are unable to expand because they are forced to rely on more
expensive sources of financing, such unregulated money lenders, because they lack access to
financial services. However, microentrepreneurs can boost their economic activity and
revenue thanks to microfinance. *Amando M. Tetangco Jr., the governor of Bangko Sentral
ng Pilipinas, claims that micro, small, and medium enterprises account for 99.6% of all
industries in the country and employ 70% of the labor force, while microenterprise activities
are carried out by about 4.1 million families from the lowest socioeconomic groups.

We have exciting potential thanks to the microfinance sector's ongoing growth. We

must take advantage of these chances because there is still a sizable and unmet need for
microfinance services in our nation.

*Speech by Mr. Amando M. Tetangco Jr., Governor of the Bangko Sentral ng Pilipinas, at the National Capital
Region (NCR) Stakeholders’ Forum on Microfinance, Manila, 19 September 2005.