Loan Study

PHILIPPINE

MICROFINANCE

DISCUSSION

PAPERS

Multiple Borrowing in the Philippines:

Review of the Literature and Research Design for a Pilot Area Study

Discussion Paper No. 2012-01

September 2012

Multiple Borrowing in the Philippines

Review of the Literature and Research Design for a Pilot Area Study1

by Ronald T. Chua and Erwin R. Tiongson

This report was made possible by the partnership involving (in alphabetical order) the Asian Institute of Management, Grameen

Foundation, MCPI, and Oikocredit. It incorporates many useful comments and suggestions received from numerous individuals at various

1

stages of the research project. These individuals include (in alphabetical order) Carlos Aquino, Manolita Gonzales, Lalaine Joyas,

Meldy Pelejo, Tes Pilapil, Allan Sicat, Christopher Tan, and participants at the annual MCPI conferences in 2010, 2011, and 2012 and

participants at the January 2011 workshop at the Asian Institute of Management. The authors are particularly grateful for the technical

assistance received from Aya Silva. The findings and interpretations and all the remaining errors in this report are entirely those of the

authors and do not represent the views of the Asian Institute of Management and other affiliated and partner organizations.

©2012 Microfinance Council of the Philippines, Inc.

INTRODUCTION

Microfinance provides resources to households that otherwise face constrained access to

finance.2 Many low-income households seek access to finance to build their businesses, but they

generally lack the collateral to access financial resources. Because microfinance has collateral

requirements that are more flexible than those of traditional banks, it can help promote productive

behavior and foster income-generating activities among low-income households.

Microfinance operations appear to have been clustered around the same communities, both in

urban and in rural areas, which may be associated with multiple borrowing. The concentration of

microfinance in...