A measure seeking to establish the barangay microfinance system that would facilitate easy and efficient access to necessary funds and credits for such entrepreneurial activities has hurdled committee level at the House of Representatives.

The House Committee on Micro, Small and Medium Enterprise Development on Monday approved the committee report on the substitute bill to House Bill 7968, otherwise known as the proposed Barangay Microfinance Act.

Bataan Representative Geraldine Roman said the main objective of the bill is to establish a system that would reach the grassroots level, namely the barangays.

She emphasized the importance of credit especially in times of pandemic, particularly giving borrowers alternative sources of funding that are accessible without unconscionable interest rates.

“It is hoped that this bill would help individual borrowers survive and not add to the economic hardship imposed by the Covid-19 pandemic,” she said.

The bill proposes to establish one or more Barangay Microfinance Cooperatives (BMCs) in each barangay, to be managed and owned by residents therein.

Roman said the bill seeks to educate the people on money lending.

The BMC shall act as a lending or credit cooperative with jurisdiction limited to its barangay.

It shall collect compulsory savings from its members for purposes of maintaining the compensating balance in relation to the same member’s loan. (PNA)