FILIPINO women are the most dependable borrowers in the country’s microfinance sector, according to industry leaders at a forum hosted by the Asian Institute of Management Wednesday.
At a panel at the second day of the Asian Forum on Enterprise for Society (AFES) 2025, executives from leading microfinance institutions said women consistently repay loans on time, make strategic financial decisions, and play a central role in managing household finances-especially in low-income communities.
‘In the 38 years of CARD MRI’s existence, we’ve proven that women are driving household finances,’ Jean Pauline Landicho, Director for Partnerships at CARD MRI, said. ‘We call our members ‘nanays’ or mothers because we know that when you give the penny to women in the family, they turn it into income-generating activity.’
Christian Paolo Allan Guanzon, President and CEO of GoodDeal, shared that even for motorcycle or OFW financing, husbands often consult their wives before applying.
‘During the pandemic, 70% of our women borrowers repaid their loans on time. They wanted to keep access to credit. That’s long-term thinking,’ he added.
Antonio ‘Tony’ Itchon, President of BDO Network Bank, added that while most of their borrowers are women, about 25% are men-often married or living with their mothers.
‘We see the same pattern in our demographics,’ Landicho confirmed.
Tackling ‘5-6’ Lending: From Exploitation to Innovation
Panelists also addressed the widespread use of ‘5-6’ loans-an informal lending system deeply embedded in many Filipino communities.
The name ‘5-6’ comes from its basic structure: for every ?5 borrowed, the borrower must repay ?6, often through daily or weekly payments. That’s a 20% interest charge on top of the principal, translating to an annualized rate of up to 240%.
While often criticized for predatory practices, microfinance leaders acknowledged that 5-6 lenders have historically filled a gap left by formal institutions.
‘Maybe 90% of our communities wouldn’t be around today without 5-6 lenders,’ said Antonio Itchon of BDO Network Bank. ‘They stepped in where banks and government failed. Now it’s our job to displace them with better, safer alternatives.’
Christian Paolo Allan Guanzon of GoodDeal added that 5-6 lenders operate with speed and minimal paperwork, often handing out cash or goods without asking questions.
‘They absorb risk because they lack information. If we can reduce that information gap, we can offer lower interest rates,’ he explained.
Examples include using supplier receipts or telco data as alternative credit indicators-especially for borrowers without bank accounts or formal IDs.
‘We convinced one financing company to accept proof of purchase instead of bank statements. That’s how we help the agriculture sector access fair credit,’ Guanzon said.
CARD MRI’s approach also counters 5-6 practices by offering unsecured loans, transparent interest rates, and weekly financial literacy sessions.
‘We don’t require collateral. Just basic documentation, consent from the spouse, and a commitment to learn,’ Landicho said.
Microfinancing 2.0: Fintech for Financial Inclusion
The panel explored ‘Microfinancing 2.0’-a tech-driven model that uses AI, mobile apps, and alternative data to evaluate borrowers and disburse loans faster.
Guanzon cited telco-based scoring as a breakthrough, showing 85% accuracy in predicting repayment behavior.
Itchon emphasized the importance of physical reach, noting that BDO Network Bank now operates over 600 branches in underserved areas.
‘Sometimes, the answer isn’t an app. It’s a teller with a belt bag collecting deposits in the market,’ he said.
Resilience in Crisis
Despite global economic slowdowns, the Philippine microfinance sector remains strong.
‘We grew fastest during COVID,’ said Itchon. ‘When others pulled back, we pushed forward.’
Guanzon added that household consumption is still rising, driving demand for financing. ‘Filipinos are still buying appliances, gadgets, and motorcycles. That keeps microfinance active.’
Landicho noted that CARD MRI’s layered structure-NGOs for ultra-poor clients and banks for growing microenterprises-helps them reach the hardest-to-serve communities.
‘We’re built for resilience,’ she said.