Wholesale microfinance loans granted by universal banks and commercial banks, including branches of foreign banks, to microfinance institutions (MFls), other than banks, as eligible compliance with the mandatory credit allocation to small enterprises

CIRCULAR NO. 570 Series of 2007

Subject: Wholesale microfinance loans granted by universal banks and commercial banks (UBs/KBs), including branches of foreign banks, to microfinance institutions (MFls), other than banks, as eligible compliance with the mandatory credit allocation to small enterprises

Consistent with the mandate of the Bangko Sentral ng Pilipinas to promote microfinance under Repubiic Act No. 8791 (The General Banking Law of 2000), the Monetary Board, in its Resolution No. 438 dated 20 April 2007, approved the amendment of the Manual of Regulations for Banks (MORB) as follows:

Section 1. Subsection X342.3 of the MORB is hereby amended so as to include therein an additional provision as follows:

“‘j. Wholesale microfinance loans granted by universal banks and commercial banks (UBs/KBs), including local branches of foreign banks, to microfinance institutions (MFls), other than banks, shall be considered as eligible compliance with the mandatory credit allocation to small enterprises: Provided, That in addition to their existing internal credit risk evaiuation and review mechanisms for prospective and existing exposures, UBs and KBs shall assess the performance of partner-MFls using the P.E.S.O. Standard.”

Section 2. Effectivity. This Circular shall take effect fifteen (15) days after its publication either in the Official Gazette or in a newspaper of general circulation.

FOR THE MONETARY BOARD:

DIWA C. GUINIGUNDO Officer-in-Charge