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| Brief History | Country Program | Area of Operations | Partners |
| Poverty Focus | Distinctive Features | Funding | Challenges and Development Plans |
The People’s Credit and Finance Corporation (PCFC) is a government-owned finance company that was registered with the Securities and Exchange Corporation on September 14, 1995 in compliance with the Social Reform Agenda of the government. PCFC is directly under the administrative supervision of the Land Bank of the Philippines (LBP). It submits reports to the Bangko Sentral ng Pilipinas on a regular basis and is audited by the Commission on Audit. The President of the Philippines appoints the members of the Board of Directors of PCFC. The National Livelihood Support Fund (NLSF) provided the entire capitalization of PCFC. NLSF is a fund operating under the supervision of LBP. The LBP president chairs the PCFC Board and also sits as administrator of NLSF.
PCFC provides wholesale funds to retail MFIs for on-lending to poor clients. The retail institutions are private entities and are called conduits or partners of PCFC. PCFC has more than 200 conduits. Its loan portfolio is exclusively for microfinance.
The company reported a gross loan portfolio of PhP 2.89 billion as of December 31, 2004. PCFC is the only government financial institution (GFI) with sole focus on microfinance. Other GFIs such as LBP, Development Bank of the Philippines, and SB Corporation have more varied loan portfolios. At the end of 2004, PCFC reported total resources of PhP 3 billion and a net income of PhP 66.1 million.
PCFC operates with only one office based in Manila. It has no offices in the regions.
PCFC has more than 200 conduits or partners. Its conduits are composed of rural banks/cooperative rural banks, cooperatives and NGOs.
According to the JBIC Study, the respective management of LBP and PCFC have agreed to perform complementary activities in microfinance rather than directly compete with each other. Under their complementation strategy, LBP will work with MFIs that require credit lines of 200 million pesos and above while PCFC will continue to service MFIs with smaller loan requirements. In addition, LBP can serve certain areas that PCFC is unable to service cost-effectively. These areas include island provinces such as Sulu, Tawi-Tawi, Basilan, Camiguin, Siquijor, Guimaras, Biliran, Romblon and Masbate.
PCFC is the only government agency mandated by law to provide financial services to the poor through wholesale funds to retail MFIs.
PCFC has a capital of one billion pesos divided into preferred shares of 900 million pesos and common shares of 100 million pesos. The entire capitalization of PCFC was provided by the National Livelihood Support Fund (NLSF). The origin of the fund is the defunct Ministry of Human Settlements. In addition, the ADB-IFAD Rural Microenterprise Finance Project (RMFP) loan was coursed thru LBP with PCFC acting as wholesale fund provider to MFIs. The RMFP was approved in April 1996 and implemented from April 1997 until December 2002.
Challenges and development plans
One major challenge faced by PCFC is its privatization. The privatization of PCFC is required under Memorandum Order No. 261. The Committee on Privatization (COP) designated LBP as the disposition entity of PCFC. LBP has formed its own task force/committee to implement PCFC privatization in coordination with NLSF and National Anti-poverty Commission (NAPC). However, according to the JBIC Study, there are still no specific privatization action plans for PCFC. Potential private equity investors are hesitant to make any decision because of the lack of a specific privatization action plan. PCFC faces difficulty in obtaining commercial loans because of the pending privatization plan. Moreover, LBP is reluctant to provide guarantee to new loans because of its current large exposure to PCFC.
PCFC financial reports gathered from www.coa.gov.ph