News Column

Filipinos welcome opening of Ibdaa Microfinance Bank

January 28, 2014

RIYADH : ABDUL HANNAN TAGOOverseas Filipino Workers (OFWs) and many communities in the Philippines have heartily welcomed the Ibdaa Microfinance Bank (IMB) under the Arab Gulf Program for Development (AGFUND), which was officially launched at the Fairmont Hotel in Makati last week. AGFUND President Prince Talal bin Abdul Aziz himself inked the agreement with Miguel B. Varela , president of the Philippine Chamber of Commerce and Industry (PCCI), in the presence of high-ranking officials from both countries, businessmen and local and international media. With an initial capital of $5 million , the bank will be operational before the end of this year, according to AGFUND Executive Director, Nasser Al-Qahtani , who was also present at the event with micro-finance experts and AGFUND banks' heads from Jordan , Lebanon and Yemen , who shared their experience during the forum. According to AGFUND's general framework, IMB will be set up in the form of a social business, a profit-making company with no dividend distribution to shareholders, who will invest the returns for solving social problems. Rashid Fabricante , an OFW advocate, said, "OFWs in need of funds for their start-up businesses or those needing support for expansion will be among the bank's major clients." "We would like to thank Prince Talal bin Abdul Aziz and AGFUND officers for their trust, confidence and responsiveness to the needs of our people, especially in helping our government with its national poverty alleviation program," Fabricante said. "This is great news indeed. I am saddened by the fact that many small Filipino entrepreneurs are forced to take loans at exorbitant rates. I can't wait to hear more about this," one source told Arab News . Saidy Malic, a community leader based in Riyadh , said: "Such an initiative to elevate and uplift conditions of poverty into a more breathable and comfortable life zone is good news for OFWs." "More importantly, it will restrict the access of marked politicians and capitalists to swallow funds or divert capital into their masterful self-interest banking operations," he added. Other sectors of community, especially from the Muslim communities, expressed their optimism that this bank will also boost the "halal" (Shariah compliant) industry in the country. Norodin Kuit said "I hope and pray that the fund would finally boost the halal economic development of the country, as we are now about to enter the new phase of economic challenge: ASEAN integration in 2015." He said the halal economy is the name of the game considering that the majority of the 10-member ASEAN countries are Muslim. "Halal is an absolute obligation (known in Arabic as 'wajib') for a devout muslim to advocate. The halal economy in the ASEAN Economic Community 2015 is considered a wide 'blue ocean' of unlimited opportunity," he said. For Sigrid Matherson GoldSmith , "Investment in the Philippines is good for the poor for business, but we must compete with other bankers by charging lower interest rates for the people to attract a lot of clients. They should open a branch in Manila , Cebu and Cagayan de Oro so that people can access their banking loan needs." She said: "Mindanao has seen peace and order and I do believe everyone interested in financing loans to help start up businesses, especially with low interest rates.

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Source: Arab News (Saudi Arabia)

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