By MAX ESTAYO

The Bangko Sentral ng Pilipinas said up to three million poor people might benefit from the microfinance housing loan product the government launched recently.

BSP deputy governor Nestor Espenilla said there are three million individuals currently covered by microfinance institutions.

"They are the natural market for the housing loan product," Espenilla said.

The Housing and Urban Development Coordinating Council, the Development Bank of the Philippines and other housing sector stakeholders recently came up with a microfinance loan that poor people may use to build or acquire their own houses.

The BSP has approved the loan product, which rural and thrift banks may offer to the public after getting accreditation from HUDCC and DBP.

The loan follows the microfinance concept; that is small loan amounts to be made available to microentrepreneurs, with repayments to be made frequently depending on the borrower’s cash flow.

Borrowers may loan up to P300,000 for house construction, or house and lot acquisition. Loans of this type have a maturity of up to 10 years.

Meanwhile, borrowers may get up to P150,000 for home improvement and repairs. These loans may be paid up to five years.

The loans are not collateral-free but there is flexibility in that banks will accept secure tenure instruments as collateral substitutes.

As of now, Espenilla said only rural and thrift banks have expressed interest to offer the housing loan product. However, he said commercial banks are also considering to enter the business by offering wholesale loans to the smaller banks.

Espenilla said the microfinance loans will be eligible for compliance to the credit allocation to agrarian reform and other agricultural credit, making participation attractive to banks.

The loans will have a risk weight of 50 percent, but zero risk-weighted when guaranteed by the Home Guarantee Corp., he said.

The loans will follow the BSP’s design features, hence, not all loans can be qualified as microfinance loans, Espenilla said.

Espenilla said the loan product is targeting existing microfinance clients and new clients without access to formal housing finance institutions.

The program will help plug the current housing backlog estimated at 1.9 million households, Espenilla said.

Espenilla said the Philippines is the first country in the world to offer a microfinance housing loan targeting the poor sector. 30