Category: Microfinance

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.

The Philippine Rural Reconstruction Movement (PRRM) was established in 1952 and is committed to the cause of Filipino peasants. PRRM’s sustainable livelihood and enterprise development strategy aims to contribute to household food security, increased incomes, and building sustainable livelihood systems. Alternative finance programs that involve the extension of financial services to the poor are implemented under this strategy.

Two PRRM chapters, North Cotabato and Camiguin, and Stichting Kapatiran Philippines, Inc. participated in a training and mentoring assistance (TAMA) with SEDPI. The TAMA resulted in financial product designs that are fit to the needs of the target markets; in improved portfolio quality; and in efficient information systems among others.

The Sustainable Economic Activity and Development is a spin-off organization of CARE-Philippines. SEAD regularly commissions SEDPI to provide training to its management staff. The trainings are designed to equip and update management staff on microfinance and microenterprise development interventions. The trainings are on delinquency management, financial product design and development, and making market work for the poor. SEDPI is also conducting impact assessment to seven of its client microfinance institutions.

An organization that dramatically improved its financial performance and organizational development throughg the training and mentoring assistance is Muntinlupa Development Foundation (MDF). MDF consulted with SEDPI when its microfinance portfolio hit bottom with approximately 80% portfolio at risk. MDF staff had low morale and management was pressured by the board to improve performance. Through TAMA, MDF was able to improve its portfolio quality to 2% while maintaining the original value of its loan exposure. The staff have higher esteem and sense of accomplishment becasue they can immediately attribute their efforts with the marked improvement in the organozation’s performance. An added motivation was the development of an incentive scheme, which in time, all the field staff were able to avail. In December 2006, MDF successfuly re-launched its main financial product and renamed it “Asenso Loan” (Loan for Progress). The organization is currently is developing its five-year strategic plan to be able to seize oportunities and reach out to more urban poor communities.

The Philippine Rural Reconstruction Movement (PRRM), one of the biggest Non-Government Organizations in the Philippines had two of its branches with microfinance operations undergo training and mentoring assistance. By January 2007, these organizations are set to finish TAMA and are prepared to re-launch their financial products. Most of the participants have availed of the option of making the TAMA credited towards a diploma course in microfinance through the Ateneo de Manila University. The branches were able to improve their financial performance, increase outreach and install systems through TAMA.

Peace and Equity Foundation (PEF) is one of SEDPI’s largest clients. Through PEF’s support SEDPI implemented a Training and Mentoring Assistance to five organizations in Southern Luzon – Sandigan ng Magsasaka, Malayang
Lapian ng Kababihan, Magsaka-CA, and Joint Enterprise Development for the Indigent. Anak Dagat Multipurpose Cooperative (ADMPC), a PEF Luzon Regional Office-supported cooperative, has demonstrated improvement in its Portfolio at Risk Ratio from 74% to 17%. For 2005, ADMPC was able to post modest financial performance compared to industry standards.
A subsector research to identify the appropriate interventions needed to support coastal-based microenterprise was also implemented in Iloilo, Bohol, and Eastern Samar. Impact assessment to four microfinance institutions are conducted – Barangka Credit Cooperative, Negros Women for Tomorrow Foundation, Tulay sa Kaunlaran, Inc., and Katotohanan, Pagkakaisa at Serbisyo, Inc.

Mr. Rapisura and Mr. Salonga are development associates of PEF. As such, they regularly conduct appraisals of microfinance and microenterprise proposals. Mr. Rapisura was part of a team that crafted proposals for the United Nations Development Program and Cordaid