MICROFINANCE IN THE PHILIPPINES: A CASE STUDY

Gregory Chase
West Liberty University

Brandon Galici
Edward Jones

ABSTRACT

Microfinance has improved the standard of living for large numbers of individuals
around the world, especially in developing countries. The loans given out by these institutions
allow individuals to transform themselves from being dependent on society to being empowered
and independent. One continuing problem facing microfinance has been the cost of administering
these small loans, which makes them unprofitable. Most funding for microfinance comes in the
form of donations or subsidies to the financial institutions.
This study considers a sustainable model of microfinance by a firm in the Philippines
using investor provided funding. The firm provides a return to investors while providing profit for
the owners. Application of this model by other microfinance institutions could remove the need for
donations and subsidies and increase the growth rate of these needed institutions.

Keywords: Microfinance, Philippines, credit, sustainable