Category: Financial Literacy

588 Remittance Receivers Trained all Over the Philippines

“I will start saving a portion of remittance once I receive it. I will no longer access loans from 5-6” These were Rosita Sawitan’s realizations upon attending SEDPI’s training on financial literacy for remittance receivers. Rosita is a 45 year old housewife who lives in Claveria, Misamis Oriental. Her daughter is an Overseas Filipino Worker (OFW) who works as a demostic helper in Germany.

In 2010, SEDPI conducted 23 financial literacy training events all over the Philippines to remittance receivers all over the Philippines. A total of 588 remittance receivers attended the training events from Albay, Baguio, Cebu City, Davao City, Davao del Sur, La Union, Misamis Oriental, North Cotabato, Pangasinan, Zamboanga del Sur and Metro Manila.

Remittances play a vital role in the domestic economy. Total remittances from OFWs received in 2009 approximately comprise 15% of the Philippine Gross Domestic Product. It is therefore important to raise the awareness of both receivers and senders to maximize the use of remittances.

SEDPI’s training on financial literacy focus on building the knowledge and skills to manage scarce resources with tools such as budgeting, saving, borrowing, spending and financial planning. It emphasizes that remittances is a major source of household income but should be treated as inconsistent and temporary. The overall goal of the training is to break the cycle of dependency on remittances.

SEDPI Launches Online Financial Literacy Course for Migrants

One of the main challenges that Overseas Filipino Workers (OFWs) face is personal financial management. Most of them do not have emergency savings, insurance, over-indebted and low investment. This condition prompted the Social Enterprise Development Partnerships, Inc. (SEDPI) to develop financial literacy programs.

On September 12, 2010, SEDPI launched an online course on financial literacy for Filipino migrants. It aims to improve the financial situation of OFWs as well as their families by providing an online platform. Migrants could learn about debt management, financial goals setting, savings plan and investments through the online course at their own pace and time. There are 90 migrants currently enrolled in the online course on financial literacy in three classes.

The sessions are presented in a highly animated and interactive manner that makes learning an enjoyable experience at the same time. It also gives practical assessments to determine one’s financial condition. Assignments are given to the enrollees that they could accomplish offline. Customized assessments and advice are given to them once they submit their assignments.

The online financial literacy is an offshoot of SEDPI’s classroom trainings on financial literacy abroad. It hopes to sustain the financial literacy program through augmenting classroom trainings with the online platform. The feedback of enrollees is positive and almost all submitted their assignments on time.

Cordaid, Pilipinas-OFSPES and the Financial Literacy Support Group (FLSG) supported the launch of the online financial literacy platform. Cordaid is one of the largest NGOs in the Netherlands. Pilipinas-OFSPES is a Filipino organization that aims to assist Filipino migrants and their families in their economic empowerment through policy advocacy, studies and capacity building programs. FLSG is a group of migrants in Rome who are graduates of the Leadership and Social Entrepreneurship course of the Ateneo School of Government.

Low Usage of Mobile Money in the Philippines

Contrary to popular belief, there is low usage of mobile money in the Philippines. This is one of the main findings of SEDPI’s qualitative research conducted on August 2010. Almost all of the respondents have little or no knowledge about mobile money.

The research aims to gain better understanding of the domestic demand for payment services in the Philippines. Payment services include sending money, receiving money, paying bills, loans and making purchases through payment service providers. Bank transfers, Western Union, LBC, M Lhuillier and Cebuana Lhuillier emerged as the most popular and most trusted payment service providers based on the research.

SEDPI conducted 22 Focus Group Discussions (FGDs) all over the Philippines with a total of 234 payment service provider users. The FGDs were organized in both rural and urban areas with respondents from the D and E markets.

The FGD results revealed that bank transfers are the preferred payment service provider. It has consistently ranked at the top of the list when clients use payment service providers to send or receive money, or to pay for bills, loans, and make purchases. Most payment service providers like Western Union, M Lhuillier, Cebuana Lhuillier and LBC are used mostly for sending and receiving money transfers. These payment service providers, in general, are hardly used in paying for bills, loans, or purchases. Only a few FGD participants had experience using mobile money. Most have little or no knowledge about this. As a consequence, they expressed mistrust on mobile money. SEDPI researchers asked the difficulties mobile money users face when using mobile money. They cited lack of Cash In-Cash Out centers (CICOs) and lack of merchants accepting mobile money.

The main purpose of sending money through payment service providers is for education and household expenses. The same is true when receiving money. Other reasons for sending and receiving money include loan payments, business expenses, bills payment, and medical expenses.

The Social Weather Stations is currently using SEDPI’s qualitative research results for its quantitative research nationwide. The Bill and Melinda Gates Foundation through Bankable Frontiers Associates commissioned the payments study. The full research results will soon be made available to the public.

SEDPI Clinches 2 Projects and Conducts 6 Training Events in March

SEDPI was able to clinch two projects from two international organizations – Mercy Corps and Microfinance Opportunities. Mercy Corps commissioned SEDPI to conduct financial education for remittance senders training to Overseas Filipino Workers in Dubai, United Arab Emirates in cooperation with Western Union Foundation. On the other hand, Microfinance Opportunities commissioned SEDPI to conduct module pilot test of its financial education microinsurance and risk management module to microfinance clients in the Philippines.

For the month of March, SEDPI staff delivered si training events. Two of the trainings were under the Ateneo-BPI partnership. The trainings were “Microinsurance and Savings” held in Cebu City and “Delinquency Management” held in Tacloban City. SEDPI staffalso delivered two training events on “Financial Product Design and Development & Innovations in Delivery Systems” in partnership with the People’s Credit and Finance Corporation through the Ateneo de Manila University. These were held in Legaspi in the Bicol region and Butuan in the Caraga region. Two customized training were also conducted for the World Wildlife Fund and Rural Bank of Katipunan held in Cagayancillo, Palawan and Dipolog, Zamboanga del Norte respectively. A total of 116 participants from 36 organizations attended the training events.

SEDPI Holds Ten Training Events in February

The month of February was fruitful for the Social Enterprise Development Partnerships, Inc. A total of 10 training events were delivered for the month. Of the training events conducted, six are customized; one is conducted under the Ateneo-BPI  partnership; one new training is introduced in Ateneo; and two are conducted in the Netherlands.
A total of 200 participants from 40 development organizations attended the training events. The customized trainings delivered are on crafting financial projections for branch operations; managing and developing human resource for microfinance institutions; fundamentals and principles of microfinance; and character and capacity-based lending. The Ateneo-BPI partnership training on financial analysis was conducted in Baguio City. Two trainings on financial literacy for remittance senders were conducted in the Netherlands both in Filipino migrant communities and communities of other migrant nationalities. The latest offering of the Ateneo Microfinance Capacity Buiilding Program successfully introduced its new training entitled: “The New Frontier: Linking Microfinance and Remittances.”

The training events were all evaluated as excellent with trainers getting a rating of 4.80 and training topics were rated 4.67. SEDPI uses a rating scale of 1 to 5 in its evaluation system, with one as the lowest and 5 as the highest possible rating.

SEDPI Conducts Training to OFWs in Germany, Italy and Netherlands

A total of five training events on Financial Literacy for Remittance Senders were conducted in Europe from January 31 to February 8, 2009.

In partnership with Stichting-Habagat, SEDPI was able to conduct three training events in the Netherlands – The Hague, Limburg and Utrecht. In Rome, Italy, the Overseas Filipinos Society for the Promotion of Economic Security (OFSPES) and in Frankfurt, Germany, the Filipino Catholic Community (FCC) hosted the training events.

The training aims to actively engage Overseas Filipinos to acquire and commit to the discipline of personal financial management to erduce their vulnerabilities. It also aims to encourage the productive use of remittances through socially responsible investments.

A total of 79 participants attended the training. One participant said, “the trainers provided practical examples that will help us improve our financial standing and in the long run, achieve our financial goals.” Some of the participants also invested a total of PhP1.5 million (USD30,000) to SEDPI Capital Credit, Inc. The investment will be extended as a loan to Microfinance Institutions in the Philippines – a true act of leveraging remittances for development through microfinance

CORDAID Guarantee to OFW Investments

The Sustainable Investment Fund is an alternative investment option to Overseas Filipinos – workers, migrants and immigrants. Because it will be used to extend loans to microfinance institutions and social enterprises (SEs), this fund does not only give positive economic returns; it is socially responsible as well.

When Overseas Filipinos invest a minimum of PhP50,000.00 for at least six months in the Sustainable Investment Fund, they are then referred to as social investors. The greater the amount and the longer the investment term, the more social investors grow their money and help MFIs and SEs.

SCCI will execute a loan agreement and a Deed of Assignment of Receivables in favor of the social investor. Postdated check/s shall be issued to the social investor covering the principal and interest due. In the event that a social investor terminates an investment before the maturity date, the interest rate will automatically revert to 3% per annum. A 30-day notice is required to pre-terminate an investment.

Through SCCI’s partnership with Cordaid, each OFW investor may have his/her investments guaranteed by paying a fee of 1.5% of their invested amount per annum. This percentage will be deducted from the interest rate detailed in the table above. The maximum coverage is PhP250,000 worth of investments.

SEDPI Conducts 94 Training Events in 2008

In 2008, SEDPI’s delivery of trainings increased by 27% from 74 training events in 2007 to 94. The increase in training events was due to the continued patronage of the Central Bank of Nigeria and the Nigeria Deposit Insurance Corporation to conduct training to their management staff in Africa. At the same time, the Ateneo-BPI Microfinance Capacity Building Partnership as well as the People’s Credit and Finance Corporation also were main stays as partners to reach out to more microfinance stakeholders.

As a result, SEDPI was able to increase its number of development organizations reached from 502 in 2007 to 985. Rural banks overtook the number of microfinance institutions reached that was dominated by NGOs in 2007. Cumulatively, SEDPI is able to reach out to 400 rural banks, 275 NGOs, 76 cooperatives and 234 other development organizations. The number of international organizations reached likewise increased.

SEDPI still maintained its positioning of reaching out to small and medium microfinance institutions (those with less than 400 million in portfolio) which comprose 88% of the total outreach.

Coupling the increase in outreach is the improvement in the evaluation of participants of the trainings conducted. SEDPI uses a scale of 1 to 5 in its evaluation where 1 is the poorest performance and 5 as excellent performance. For 2008, rating on SEDPI trainers improved from 4.60 to 4.65 and rating on training topics improved from 4.39 to 4.59.

SEDPI continues to draw inspiration from this achievements and will strive to reach out to more microfinance stakeholders and continually improve the delivery of its services.

SCCI Inks Cooperation with Cordaid on Remittances

In 2008, Cordaid and SCCI inked an agreement to create models on how remittances could be leveraged for development through microfinance. The cooperation consists of a guarantee mechanism from Cordaid for OFW investments to SCCI and conduct of financial literacy trainings to both remittance senders and receivers.

Cordaid is one of the world’s biigest international development organizations with a network of almost a thousand partner organizations in 36 countries in Africa, Asia, Central and Eastern Europe and Latin America. It has more than 90 years of experience in emergency aid and structural poverty eradication. The counterpart bodies work on various themes, including healthcare, quality of urban life, access to markets, and peace and conflict.
 

Linking Up with CORDAID

SEDPI and SCCI have signed cooperation agreements with Cordaid, one of the largest NGOs in the Netherlands. The SEDPI-Cordaid partnership has four components:

l The Capacity Building for Small and Emerging Microfinance Institutions seeks to improve the financial performance and organizational sustainability of small and emerging MFIs. Participating MFIs will be given the tools and techniques to improve their financial products, streamline service delivery, and reach out to more poor households. Under this component, eight MFIs are undergoing TAMA all over the Philippines. A 0% capacity building loan may be extended to the MFIs so they can cope with the expenses incurred for TAMA.

l The Wholesale Loan to Microfinance Institutions complements the first component. Through SCCI, small and emerging MFIs can access loans that would otherwise be unavailable to them. By establishing their loan track record, MFIs can eventually borrow from commercial sources.

l The Financial Literacy Program for Remittance Senders and Receivers aims to inculcate in these groups the discipline and commitment of personal financial management. The program also encourages the productive use of remittances through socially responsible investments and intends to break the cycle of dependency on remittances. The training provides concrete guidelines and practical tools to make informed decisions on investments, business establishment, and financial planning. To date, some 1,000 overseas Filipinos have attended the training programs held in Austria, Belgium, Denmark, Germany, Hong Kong, Italy, Luxembourg, The Netherlands, Singapore, and United Arab Emirates.

l The Guarantee Fund to Migrant Investments seeks to boost migrants’ participation in socially responsible investments. Migrants may invest in SCCI’s Sustainable Investment Fund, which carries a higher rate of return than commercial banks. Cordaid has placed a guarantee to migrant investments placed with SCCI through an escrow agreement with Metropolitan Bank and Trust Company. The guarantee aims to protect migrant investments in SCCI up to PhP250,000. The SCCI pioneer investors are members of the United Migrants Development Workers and Stichting-Habagat based in the Netherlands.

Cordaid is one of the world’s biggest international development organizations with a network of almost a thousand partner organizations in 36 countries in Africa, Asia, Central and Eastern Europe, and Latin America. It has more than 90 years of experience and expertise in emergency aid and structural poverty eradication. The counterpart bodies work on various themes, including healthcare, quality of urban life, access to markets, and peace and conflict.