Author: Mariel Vincent Rapisura

SEDPI strives to make its provision of capacity building interventions affordable and accessible particularly to small and medium microfinance institutions. Although it offers the most affordable capacity building services, it is not dependent on subsidies to ensure the continuous provision of services. It has employed the following strategies to make this happen: (a) employing brilliant, young and Philippine-based human resource; (b) integrate research in its consulting services to locally adapt training materials; (c) partner with market players, particularly wholesale funding sources and donors, that would gain mutual benefit in the conduct of capacity building services.

The overall objective is to increase the number of microfinance institutions that are able pass standards of commercial funding sources to access funds. In the capacity building cooperation, Cordaid will provide funds for capacity building to microfinance institutions through SEDPI. This will be done in several options: (1) provide grants for capacity building applicable to challenged microfinance institutions; (2) provide 0% interest capacity building loans to emerging microfinance institutions; and (3) provide interest-bearing capacity building loans to strengthened microfinance institutions through the Bank of the Philippine Islands.

Challenged Microfinance Institutions are those that are facing financial and organizational challenges to attain microfinance standards. The board and management of Challenged MFIs are committed to attain microfinance standards in the next two to three years and are willing to undergo intensive capacity building. One major obstacle of Challenged microfinance institutions is their inability to afford capacity building services. On the other hand, Emerging microfinance institutions are defined that are in the process of reaching a scale of operations to attain microfinance industry financial performance standards. The board and management of Emerging MFIs are committed to attain the microfinance industry standards in the next 12 months and will undergo intensive capacity building. Lastly, strengthened microfinance institutions are small and medium-sized MFIs that have attained microfinance industry financial performance standards that plans to expand its operations or introduce new innovations in its operations. Both emerging and strengthened microfinance institutions usually have difficulty to access funds from the market or are able to access funds but these are not enough to meet their financial needs.

In April 2008, the Academy for Microfinance Development in Indonesia (AMiDA) invited SEDPI’s president, Mr. Mariel Vincent Rapisura, to be part of the first faculty to deliver trainings in AMiDA. Mr. Rapisura delivered a training on entitled: “The New Frontier: Linking Microfinance and Remittances.” The participants evaluated the delivery of Mr. Rapisura at 4.78 from a possible high score of 5.00.

The Microfinance Innovation Center for Resources and Alternatives (MICRA) hosted AMiDA. MICRA is an INdonesian foundation focused solely on the development of the microfinance industry. Mercy Corps founded MICRA in early 2006 to institutionalize and expand its work over the past six years in microfinance throughout Indonesia. Three of SEDPI’s staff were participants in AMiDA.

 

Progressive Bank Inc. (PBI) is a rural bank operating in Panay Island. Considered as a significant player in its market, PBI enjoys a Php 116 million portfolio with 15,000 clients and although it has a near perfect performance boasting a 2% Portfolio at Risk Ratio, its management still feels there is plenty of room for improvement.

PBI commissioned the services of SEDPI for an organizational appraisal in March 2007. The result of the appraisal led PBI’s management to forge partnership with SEDPI to further improve its financial products and services with the goal of achieving both its financial and social missions. With the assistance of the BPI Capacity Building Loan, PBI was able to spread its capacity building expenditures in the next three years.

From the appraisal, the needs of the organization were identified. The capacity building needs of the staff were identified and focus was given on crafting incentives schemes, compensation system, and staff benefits. On the client level, better product designs were needed to win the already saturated market over well-established competitors. Through the training and mentoring assistance (TAMA), PBI was able to clarify its niche as the leading service provider of financial services and enterprise development support for the economic empowerment of the poor in Panay.

One of the most recent PBI-SEDPI partnerships was the Strategic Planning held in October 2007. On hand for the planning were PBI’s board members, managers and supervisors, ensuring holistic and participative discussions on vital issues.  The institutional values, vision, and mission were crafted based on the understanding and direction favored by both the board and staff. Key Result Areas, performance indicators and strategies were set not only from careful market research, but also from realistic capacities of field staff and the institution.

In the end, the strategic planning resulted in PBI’s clear direction to all its stakeholders

With plans of supporting microfinance institutions in its country, members of the Central Bank of Nigeria (CBN) traveled to the Philippines to attend trainings at the Ateneo and visit a well-established microfinance cooperative in Manila. Not long after, CBN employed the services of their Ateneo trainers, SEDPI, to capacitate its staff on microfinance.

The partnership with CBN allowed SEDPI to visit Nigeria, a country with a population of 140 million (2006) and a per capital GDP of $694 (2005). The first of two sets of trainings was held on March 2007, with topics including Fundamental and Methodologies of Microfinance, Financial Product Design, and Financial Analysis.  The trainings ran for two weeks, and were held in Lagos, Nigeria.  In its reviews, the topics were seen as “very promising, interesting, and relevant.” Further, the participants commented that the speakers gave “excellent presentations” and have “deep knowledge” of the topics.

The second leg of the trainings was again held in Lagos, this time on the topics of Delinquency Management, Risk Management for Microfinance Institutions, and Managing, Developing, and Supervising Microfinance Staff.  The trainings are best summarized by a comment made by one participant: “The lectures were enlightening, and the manner of presentation was refreshing.”

Talks are now underway of providing regular trainings to CBN staff in the future. With the help of SEDPI’s capacity building, it is hoped that the Central Bank of Nigeria be one day a key proponent of microfinance in their country.

The Agricultural and Rural Development for Catanduanes, Inc. (ARDCI) is a non-government organization operating a microfinance project. It received funding from the Eurpoean Union until 2002. The organization operates in the provinces of Albay, Catanduanes, Camarines Sur and Sorsogon. It envisions itself as a sustainable institution for the economic empowerment of the enterprising poor in Bicol and beyond.

ARDCI is a typical NGO facing the challenge of financial sustainability. In the last four years, it has posted net losses in its books. As an organization governed by members coming from the grassroots, it strives to achieve financial sustainability and at the same time diligently keep its social mission on track.

ARDCI formed partnership with SEDPI at a time when all of its partners seemingly turned their backs on them. With the partnership and in a span of eleven months, ARDCI was able to turn around its operations and posted positive income, as of November 2007, for the first time in five years.

The road to turning ARDCI around entailed a lot of sacrifices and constructive changes. Thanks to its committed top management and front liners, everyone willingly participated in bringing back the glory of ARDCI.

SEDPI revamped the entire information system, retooled the staff and re-trained the board. The flow of communications was enhanced and internal control strengthened. What used to be reports arriving three months late could now be accessed within a week with high degree of accuracy. What used to be a continuously deteriorating portfolio quality now boasts 5.25% portfolio at risk.

Being one the major microfinance wholesalers in the country, the Philippine Credit and Finance Corporation, familiarly known as PCFC, aims to (vision/outreach). It differentiates itself from other wholesaling institutions by providing regular trainings to its microfinance clients. In 2007, it commissioned SEDPI to develop and lead its trainings in various key cities in the country.

After sending two of its staff members to attend a Financial Analysis training at the Ateneo, PCFC saw it fit to contract SEDPI as trainors for its clients. Two trainings were identified: 1)Strengthening Internal Controls and Management Information System (SIC-MIC), which tackles internal control measures, auditing, and pertinent documentation; and 2) Strategic Credit and Risk Management (SCRM), a course focusing on client selection and delinquency prevention.  As it was important for PCFC to bring the trainings near its clients, each course was to be conducted twice in Luzon and Mindanao, and once in the Visayas.

The frequency of trainings, its geographic scope, and the number – and quality – of participants is a mere testament to PCFC’s strength as a wholesaling institution. From July to October, a total of ten trainings on SIC-MIS and SCRM were conducted in the cities of Manila, Iloilo, Cebu, Davao, and Cagayan de Oro.  More than 130 participants from over 60 microfinance institutions were in attendance. Among them were representatives from Center for Community Transformation (CCT), Lamac Multi-Purpose Cooperative, Life Bank Foundation, Metro Ormoc Community Cooperative (OCCCI), and Agricultural and Rural Development for Catanduanes, Inc. (ARDCI). The variety of organizations, from cooperatives, to banks, to development foundations, made the trainings further enriching as experiences were shared and ideas were ventilated.

The tiring schedule did not deter the speakers to provide pleasant and informative sessions to the participants. The trainings were met with good evaluations and positive comments. At the end of the day, the participants look forward to seeing SEDPI at front of their future trainings with PCFC.

The Philippine Credit and Finance Corporation (PCFC), one the pioneer microfinance wholesalers in the Philippines, commissioned SEDPI to develop and lead its trainings in various key cities in the country.

After sending two of its staff members to attend Financial Analysis training at the Ateneo, PCFC saw it fit to contract SEDPI as trainers for its MFI clients. Two trainings were delivered to PCFC’s MFI clients: 1) Strengthening Internal Controls and Management Information System, and 2) Strategic Credit and Risk Management (SCRM).  As it was important for PCFC to bring the trainings near its clients, each course was conducted twice in Luzon and Mindanao, and once in the Visayas.

From July to October 2007, a total of ten trainings were conducted in the cities of Manila, Iloilo, Cebu, Davao, and Cagayan de Oro.  More than 130 participants from over 60 microfinance institutions attended the training events. The variety of organizations attending such as cooperatives, rural banks and non-government organizations, made the trainings further enriching as experiences ideas were shared.

The tiring schedule did not deter the speakers to provide pleasant and informative sessions to the participants. The trainings were met with good evaluations and positive comments. At the end of the day, the participants look forward to seeing SEDPI at front of their future trainings with PCFC.

A total of 11 MFIs in the Philippines who are at par with industry standards in terms of their financial performance and duly recognized in their respective areas of operations as market leaders participated in the documentation of their best practices. Two organizations, the National Confederation of Cooperatives (NATCCO) and the Sustainable Economic Activity Development (SEAD) funded the documentation of these best practices.

Through SEAD, seven MFIs with best practices will be published in 2007. Each MFI will tell their success story and the challenges they faced in the process. Their strategies in achieveing success will be shared. SEAD is a non-profit organization that provides wholesale funds to microfinance institutions in the Philippines. It was formerly a project of CARE-Philippines. In 2007, it will transform to a private corporation to enable it to compete more effectively in the market.

Four cooperatives: Novaliches Development Cooperative (NOVADECI); Lamac Multipurpose Cooperative (LMPC); Panabo Multipurpose Cooperative (PMPC); and Ormoc Community Credit Cooperative (OCCCI) were documented under the auspices of NATCCO. Their best practices became the basis of the development of NATCCO’s microfinance brand that specifically caters to cooperatives with microfinance operations.

 

Progressive Bank Inc. (PBI) is a rural bank of operating in Balasan, Iloilo. Considered as a significant player in its market, PBI enjoys a Php 70 million portfolio with close to 20,000 clients. And although it has a near perfect performance boasting a 2% PAR, its management still feels there is plenty of room for improvement.

It was thus auspicious that PBI attended a Governance Training facilitated by SEDPI in Iloilo City. Its proponents experienced first hand SEDPI’s brand of training. Shortly after, PBI contracted SEDPI as partners in improving the former’s microfinance operations.

The PBI-SEDPI partnership started with an organizational appraisal of the bank and its sister institution, Ugyon Foundation. Its microfinance clients were interviewed on their needs and capacity, e.g. their desired interest rates, and over-all satisfaction of Progressive Bank’s products and services. On the other hand, the staff was given microfinance diagnostic exams to gauge their knowledge and understanding of the industry. They were also interviewed as to how they perceived their institution and how satisfied they were with its management.

From the appraisal, the needs of the organization were identified. On the organizational level, it was observed that the staff needed further capability building, especially with regard to client selection and delinquency management. Incentives schemes, compensation system, and staff benefits were also major points of concern. On the client level, better product designs were needed to win the already saturated market over well-established competitors.

On May and July of 2007, SEDPI embarked on a monumental task of giving six trainings on Delinquency Management and Character Based-Lending to all Progressive Bank and Ugyon staff. These were the first of several interventions applied by SEDPI for the Progressive Bank network.   The trainings received positive evaluations. “There are so many things that can help me [perform my job well] in this seminar,” As shared by one of Ugyon’s staff.  “[It] improved my skills and knowledge on handling and managing clients because of the excellent presentation of the speakers,” she happily adds.

One of the most recent of the PBI-SEDPI partnership was the Strategic Planning held in October 2007. On hand for the planning were PBI’s board members, key managers and officers, and staff supervisors, ensuring holistic and participative discussions on vital issues.  The institutional values, vision, and mission were crafted based on the understanding and direction favored by both the board and staff. Targets and strategies were set not only from careful market research, but also from realistic capacities of field staff and the institution.  Now, PBI’s direction is clear to all its stakeholders.

Shortly after the Strategic Planning, PBI moved to enhancing their current financial products through the Product Design Seminar.  (Results of the PD seminar).  Today, PBI is implementing their market-based financial products, one of the many stepping stones towards improving the lives of the poor and being a significant microfinance player in Panay.