Spearheaded by economic progress advocates led by former President Corazon C. Aquino, the Pinoy ME (Pinoy Micro Enterprise) has the potential to raise P25 billion over time.

"By the minimum loan size of P5,000 lent to 5,000 poor families, that is equal to P25 billion. But you don’t need all that billions. You can leverage P5 billion with resources of micro-finance institutions (MFI) and use its multiplier effect to give you P25 billion," said Danilo A. Songco, PinoyME president and chief executive officer in a press briefing during an International Institute for Rural Reconstruction (IIRR) seminar.

Aquino said Pinoy ME is expected to draw funds even from large commercial banks as a result of an existing microfinancing profitability models.

"Before there weren’t big commercial banks. Now BPI (Bank of the Philippines Islands) is here. There’s something in it for them," Aquino, PinoyME convenor, said in an interview at the sidelines of the IIRR seminar.

Deogracias Vistan, PinoyMe Social Investment Fund chairman, said a high 98 percent collection rate track record of MFIs should lure private investors in financing enterprises in the poorest regions of the country.

Ambassador Jesus Tambunting, also chairman of microfinancing firm Planters Development Bank (PDB), said source of funding for micro-enterprise is not really a problem, but the bottleneck is in increasing MFI’s capacity to lend to the rural areas.

"There’s enough fund for microfinancing, but we have to get MFIs to scale up and raise volume of (loans). This is where PinoyME comes in. They’re all ready for us to draw on their funds," said Tambunting.

PDB itself has obtained a 0,000 grant from the World Bank’s International Finance Corp. that strengthened its capability to conduct micro-lending.

IIRR President Juan Miguel Luz told the same press briefing that IIRR has been receiving grants from international institutions for its rural reconstruction projects.

IIRR is receiving a grant from the Japan Fund for Poverty Reduction as part of the Asian Development Bank to finance a natural resource management program in the watersheds of Davao and AGusan Marsh. This program has a three-pronged objective: environmental protection, livelihood through agroforestry and natural resources management, and rural health protection.

PinoyME is targeting to more extensively mobilize the operations of 300 MFIs of which eight institutions have excelled to capture a 70 to 80 percent market out of a P2 billion microfinance lending.

While existing lending is mainly for retail enterprises in cities among more affluent communities, Vistan said the target is to expand funding in the farflung areas including food production from agricultural activities that will offer more livelihood opportunities. The target is really to lend to the five million population from the poorest regions.

"There’s only so much retail businesses. There should be loans for the upland market," he said.

Songco said Pinoy ME also has a P250 million loan base from a United States Agency for International Development (USAID) through the Philippine Business for Social Progress. A separate P10 million has been raised from individual funders.

When the project takes off, it will source funding from more established capital market, bond-raising sources as an eventual means to prop up economic growth.

"Before we’re looking at big companies (to do rural financing), but people in the rural areas remain poor. Now there’s a shift because MFIs are showing us the way. We need to build on their success to create an economy from below. It’s a new level of people power that has more power in poverty reduction," Songco said.

Pinoy ME’s target is to make the smaller MFIs to grow and expand in rural areas and enable the eight leader MFI’s to finance bigger enterprises.