Assessing the Relative Poverty Level of MFI Clients in Cebu and Misamis Occidental

This study aims to determine the extent to which microfinance institutions (MFIs) reach the poor. The study selects two cooperatives, each one with a separate microfinance program, aiming to reach poor clients. One of them is located in Cebu city and the other in Misamis Occidental.

The paper discuses:

• Main features of the two cooperatives;
• Methodology of the study;
• Collection of data;
• Survey instruments.

The paper presents results of the relative poverty assessment MFI clients versus non-MFI clients:

• In Cebu:
  • There was no difference in the benchmark indicator of per capita expenditure on clothing;
  • MFI clients had higher levels of education, better housing indicators, food security and more self-employed adults than the non-MFI clients.
• In Misamis Occidental, MFI clients as compared to non-MFI clients showed that the MFI clients had:
  • Higher per capita expenditures on clothing;
  • Higher levels of education among adults;
  • Better food security;
  • Little difference in terms of housing;
  • Higher proportion of self-employment.

The paper:

• Concludes that MFIs reach only the enterprising poor, who are engaged in non-farming activities that only need operating capital to sustain their activities;
• Recommends that the other categories of poor, such as those in agriculture, will have to be reached by other programs, like agriculture programs or social welfare programs, that are suited to their special needs.