Microfinance has long been recognized for its potential to improve financial access, inclusion, mobility, and poverty alleviation among low-income households. In the Philippines, however, evidence on its welfare-enhancing effects remains limited. This paper presents findings from the 2024 Philippine Microfinance Survey, a nationally representative dataset covering 1,900 households, designed to evaluate the role of microfinance in supporting households during economic shocks.

Results show that microfinance significantly improved consumption stability for 88.4% of users and enhanced resilience for 65.4%, particularly in response to the COVID-19 pandemic, inflation, and natural disasters. Critically, we find that microfinance institutions (MFIs) play an important role in increasing clients’ exposure to financial literacy programs. Among respondents who availed of microfinance services, the proportion who had attended formal or informal financial education programs was 2.4 to 6.8 times higher than non-clients. Formal financial training is strongly and significantly associated with improved household resilience and quality of life, suggesting that MFIs not only provide credit but also build financial capability.

Nonetheless, gaps in financial access and literacy persist, especially among the poorest households. These findings underscore the need to scale up financial literacy efforts alongside access to tailored microfinance products. The results offer key insights for MFIs, policymakers, and development actors seeking to expand the impact of microfinance on economic resilience and inclusion in the Philippines.

what’s inside:

  1. The role played by microfinance on the financial resilience of low income families in the aftermath of unexpected shocks in the Philippine setting

  2. Relevant literature

  3. The Philippine Microfinance Survey (PMS), including the sampling methodology and the empirical methodology for the analysis

  4. Discussion of the results

  5. Policy recommendations

“We find that over and beyond their purpose and ability to spur entrepreneurial and other income-generating activities of clients, microfinance institutions play a crucial role in enhancing the consumption-smoothing capacity and financial resilience of
low-income Filipino households.”
 
 

This project was supported by CARD Inc. and ASA Philippines Inc. The authors are affiliated with WeSolve Foundation. This project was granted ethics clearance by the Social Science Ethics Review Board of the Philippine Social Science Council on 7 June 2024. For inquiries related to this report, email hya@wesolve.ph

Version History:
Version 2: July 14, 2025: Correction on page 17: "Among those aware of microfinance, 43.4% had availed of at least one product or service from an MFI."
Version 1: July 1, 2025: Initial upload.