MANILA, Philippines — The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) has approved a new microfinance loan called “microfinance plus” that microenterprises and small businesses can avail of to fund their expanding operations.

The BSP issued Circular No. 744, which was approved last December 28 and signed by BSP Governor Amando M. Tetangco Jr., amended Circular No. 694 to include the microfinance plus in the list of microfinance loan categories.

Under revised rules but similar to other microfinance loan products, a borrower can take out a maximum of P300,000 to fund his growing business. This is technically a second loan for borrowers that could show sustained capacity to pay.

Circular No. 744 states, “the borrowers that will qualify will have a track record of at least two microfinance loan cycles in the P50,000 to P150,000 range demonstrating the success of the business, its increasing credit demand and subsequent increased capacity to pay.”

Microfinance, generally, has originally intended to mean financing for microenterprises or small livelihood activities but the BSP has since expanded the loan products to include microfinance housing, micro-agri loans, micro-insurance and micro-deposits.

For all loans, it starts with P150,000 up to a maximum of P300,000. Currently, there are 202 microfinance institutions operating in the Philippines.

By the end of the third quarter this year, microfinance loans have increased to P7.3 billion from end-December’s total of P6.5 billion.

Tetangco in a previous interview said they continue to enhance policies to promote, grow and increase microfinance business in the country, which was one of the most important pro-poor mandates of the General Banking Law of 2000.

He said the banking system is much more inclusive today with almost 979,353 microfinance borrowers with loans amounting to P7.53 billion. This was higher than end-2010’s 932,622 borrowers.