Category: Microfinance

The Social Enterprise Development Partnerships, Inc. (SEDPI) conducted an impact assessment research for Vision Bank, Inc. last July 8-12, 2013 in Virac, Catanduanes. The goal of the research is to quantify the impact of Vision Bank loans to its regular and microfinance borrowers—mostly local government unit employees, public school teachers and microentrepreneurs. The results of the study are slated to be incorporated in the institution’s strategic planning for years 2013 through 2015.

SEDPI staff surveyed more than 100 respondents comprised of Vision Bank’s regular and microfinance borrowers including dropout clients.  Considering the large number of Overseas Filipino Workers (OFWs) in Virac, SEDPI interviewed 30 remittance receivers intended for Vision Bank’s development of financial products for OFWs and their families.

Initial impact assessment results show that a majority of Vision Bank’s clients use their loans for purposes of education, household improvements and income generating activities (IGAs) like food vending and raising livestock. The most common attributable impact of loans to clients’ IGAs is the purchase of new products and equipment for business. On the household level, the top three expenses are food, IGA expenses and to education. It is notable that many microfinance borrowers attribute the education of their children to Vision Bank.

In terms of operational performance, respondents state what they liked best: fast release, an accommodating staff and generally good policies by the institution. On the other hand, many respondents feel that the loan interest is high and that the particular policy of co-maker appearance should be adjusted. The latter sentiment holds true especially for public school teachers that have difficulty leaving their weekday classes. Group liability also ranks as one of the policies least liked by clients as their own records are affected by the non-quality performance of another member. Overall, respondents desire more loan windows for emergencies, housing and medical purposes.

The results also show an increase in competition for Vision Bank, given the rise of more cooperatives and financial institutions offering lower interest rates in the area. It is noteworthy to mention that giveaways or souvenirs are also important factors that maintain client patronage and loyalty.

With this research, SEDPI hopes that better and user-centric financial products can be developed further to fit the needs of clients and render them financial empowerment in the near future.

Prominent Italian historian Niccolo Machiavelli once said, “The one who adapts his policy to the times prospers, and likewise the one whose policy clashes with the demands of the times does not”. The partners of Social Enterprise Development Partnership, Inc. (SEDPI) hold this statement true after participation in Strategic Planning workshops that SEDPI staff organized and facilitated last June.

Progressive Bank, Inc. (PBI), based in Iloilo, held its strategic planning last June 15-16, 2013 at Jaro City. A total of 32 attendees comprising of PBI’s Board of Directors and top and middle management staff participated in crafting the institution’s five-year strategic plan for years 2013-2017.

Vision Bank Inc.’s strategic planning workshop took place last June 22-23 in Virac, Catanduanes, highlighting the need to acclimatize with the changing needs of their current and potential clients while maintaining an edge amongst competitors.

People’s Alternative Livelihood Foundation of Sorsogon, Inc. (PALFSI), SEDPI’s partner in Sorsogon, also recognized the need to change its policies and strategies during their strategic planning last June 25-26.

All three financial institutions successfully fulfilled and participated in SEDPI’s two-day Strategic Planning outlined by the acronym “VMOKRAPISPATRes”. The acronym is drawn in a ribbon diagram and stands for Vision, Mission, Objectives, Key Result Areas, Performance Indicators, Strategies, Programs, Activities, Tasks, and Resources. Each session begins with an introduction and definition of terms, followed by a series of workshops entailing participants to share their insights and opinions.

Included in the discussions are topics on assessing the external and internal environments and institutional values. The new Vision-Mission (VM) statements–core areas in the planning–of the three institutions are summarized in a table below:

	Progressive Bank, Inc.	Vision Bank	People’s Alternative Livelihood Foundation of Sorsogon, Inc
Vision	“A progressive, stable and caring financial institution that uplifts the quality of life of the Filipino people.”	“A forerunner in grassroots-led delivery of sustainable development services for the empowerment of the poor in Bicol.”	“A sustainable organization of empowered stewards for the improvement of the lives of poor Filipinos.”
Mission	“To be the leading service provider of innovative financial services and enterprise development support for the economic empowerment of the poor in Visayas.”	“We are a progressive and sustainable bank harnessing the strengths of our stakeholders for the empowerment of the poor in the Philippines.”	“A sustainable organization of empowered stewards offering financial services and client security programs for the improvement of the lives of poor Filipinos.”

SEDPI received positive feedback from the aforementioned institutions in the conduct of its strategic planning. As Ms. Norina J. Calupit, Finance Administrative Manager of PALFSI commented: “Masaya ako sa kinalabasan sa dalawang araw, at least madami talagang outcome, nakagawa tayo ng vision and mission, objectives. Natapos din natin ‘yung VMOKRAPISPATRes, kabisado na by heart..tapos simple lang at maayos, yung talagang galing sa amin ang mga naisulat na output, hindi tulad ng dati (I’m satisfied with the outcome for two days, we were able to craft our vision, mission and objectives. We also finished VMOKRAPISPATRes, memorized it by heart…and the process was simple yet efficient, with the output coming directly from us unlike before)”.

SEDPI carries out a client-centered approach in the conduct of its workshops, encouraging participants to be fully invested in the creation of their own strategic goals and plans.

The province of Kalinga is located within the northern Cordillera region of the Philippines, twelve hours away from Metro Manila by land. Through a partnership with the Small Business Corporation (SBC), SEDPI conducted an organizational appraisal for BIBAK Multi-Purpose Cooperative (BMPC) running from May 22 to 26, 2013. BMPC operates mainly in Tabuk, with its home office situated within the campus of the Kalinga-Apayao State College. Some of its clients are coffee farmers in Balawag that are registered under the Department of Trade and Industry’s (DTI) Rural Micro Enterprise Promotion Program (RuMEPP). SBC also provides financial assistance to DTI’s RuMEPP program that prioritizes 19 provinces in the country, one thereof is Kalinga province.

SEDPI offers Organizational Appraisal (OA) as one of its capacity-building services to microfinance institutions. OA aims to analyze an organization’s overall performance in terms of finance, human resource, information systems, product design, governance, marketing and promotion, and general operations.

A majority of BMPC’s clients are from the academe – teachers and school staff– while a small percentage is composed of RuMEPP clients. The academicians have stayed longer with the cooperative than the RuMEPP clients, with most memberships lasting 5 years or more. Meanwhile, the coffee farmers recently joined BMPC in 2010 when the program piloted in Kalinga. SEDPI’s initial findings reveal that the clients’ membership to BMPC has helped them in funding their income generating activities (IGAs), educational expenses for their children, and food costs. In line with this, their economic status has greatly improved as compared the years prior to their affiliation.

The clients’ IGAs involve rice and coffee farming and fruit harvesting. Some of the teachers live inside the campus and a portion of farm land is given to them. Rice and coffee planting and fruit harvesting are two main farming activities salient to BMPC clients. In Balawag, a distinct mushroom cultivation is also exercised. IGAs either expand or produce new products and services. Equipment acquisition pushed through as well.

Moreover, the results disclose that educational expenses for the clients’ children are financially shouldered in terms of payment in tuition fee, school supplies, and daily allowance. It is also notable that BMPC clients’ diet has improved in the past year, attributing it to the cooperative’s financial services. Part of the appraisal is assessing human resources management and employee well-being of the cooperative. According to SEDPI’s findings, management staff has low satisfaction in terms of its incentive scheme despite exemplary performance. Nevertheless, BMPC garners high overall satisfaction from its clients.

Ms. Josephina “Josie” Vengco, the Department Manager in the Small Business Corporation, agreed of the results of the initial findings: “I agree with the initial findings so far, especially the issue pay of staff. It’s good that you pointed out underlying sentiments like those.”

SBC establishes partnerships with private organizations to capacitate microfinance institutions and pre-microfinance institutions. SEDPI is proud to be a partner of SBC and cooperatives such as BMPC. It is also slated to conduct BMPC’s strategic planning session this July.

The Social Enterprise Development Partnerships, Inc. (SEDPI) recently bagged a United States Agency for International Development (USAID) funded project on June 14, 2013. The project is on the conduct and development of financial education support on mobile money services entitled Scaling Innovations in Mobile Money (SIMM). for the The Development Alternatives International (DAI) is the implementing partner of USAID-funded SIMM.

Scaling Innovations in Mobile Money (SIMM) is a 2-year USAID project that started on April 25, 2012 in order to scale the uptake of mobile money adoption and usage in the Philippines.  President Aquino and USAID Administrator agreed to implement SIMM in Washington, DC on June 8, 2012.

Major mobile money products in the market are BanKO (owned by BPI, Globe and Ayala Corp.), Globe’s G-Cash and Smart Money.  Uses are sending/receiving money, paying bills, buying pre-paid load and other goods using the mobile phone.  Consumer benefits include reduced costs and increased convenience and security.

SIMM will partner and build on existing training platforms of government agencies, partner organizations from businesses, cooperative and other microfinance institutions and NGOs to further develop financial literacy training programs and materials including special discussions on mobile banking, consumer protection and awareness, product uptake and improved product use, and personal development for improved livelihoods.

DAI engaged SEDPI to develop and conduct financial education, particularly for micro finance institutions, small medium enterprises, government, and other low income households as the target beneficiaries of the project.  SEDPI will be delivering the following services: conduct and development of financial education on the adoption of mobile money; training of trainers on financial education for the adoption of mobile money; develop practical training materials such as comic books and videos on financial education with special focus on adoption of mobile money; and provide follow up support on the rollout of the program.

With the program, SEDPI hopes that it could contribute to the advancement of financial literacy of Filipinos. SIMM is SEDPI’s first engagement with USAID and DAI.

SEDPI conducted a week-long organizational appraisal for a Leyte-based microfinance institution, the Fatima Multi purpose Cooperative (FMPC). In partnership with the Small Business Corporation (SBC), the appraisal ran from June 6 – 12, 2013 covering areas where FMPC operates, from the rural towns of Calubian and Palompon to the cities of Naval and Tacloban.

Organizational Appraisal (OA) is one of the main services that SEDPI provides. OA touches on internal and external on-the-ground information relevant to the effectiveness and efficiency of a microfinance institution. This includes gauging the impact of microfinance to clients, and evaluating internal management procedures versus good practices in the industry.

For FMPC, clients come from varied backgrounds such as fishermen, farmers, government employees and micro entrepreneurs who are mostly sari-sari store owners. Based on SEDPI’s findings, clients experienced improvement in their economic well-being compared to when they were not members of the cooperative. Results also show that a majority of the clients invested their loans for income generating activities like purchase of new equipment or the expansion of their business. In rural Palompon where FMPC’s clientele base is composed mostly of fishermen, loans were used to buy or repair fishing boats locally referred to as “lantsa”. This increased income by lessening the cost of boat rent and allowing more members of the family to engage in fishing. Meanwhile, other clients used the loan for educational purposes of their children such as tuition fees, daily allowances, and school supplies. FMPC clients were also able to make household improvements: house repairs, expansion, and better access to water and electricity. The usual reasons for client dropouts are delinquency due to paying multiple loans and unforeseen calamities. This proves true especially for farmers that experience crop failure during the typhoon season.

In terms of microfinance operations, SEDPI identified key improvement areas for FMPC such as providing internal staff training based on knowledge and skill gaps, financial management for middle and top managers, delinquency management, management information systems, internal controls and human management. Nevertheless, FMPC gathers an overall high satisfaction rating from its clients.

From SBC, the Department Manager Ms. Josie Vengco comments on SEDPI’s consultancy work for FMPC, “I like SEDPI’s methodology of micro-assessment, planning interventions based on the needs of the organizations and by studying the details. The gist of the information is embedded in the details. ” She also agrees with SEDPI that the challenge for most MFIs, especially cooperatives, are dealing with high delinquency and client exit. “FMPC is just one of the many MFIs that have to deal with client dropouts, this can be due to geographical challenges like having scattered areas.” All the same, Ms. Vengco is looking forward to the full results of the research in order to pursue further capacity building programs for SBC’s borrowers, including FMPC.

These organizational appraisal findings suggest next capacity building activities for FMPC in the comings months focusing on the creation of strategies that will enable FMPC to provide more efficient and effective financial services.

The Pashchimanchal Grameen Bikas Bank, Ltd. (PASGBB) from Nepal sent ten of its senior officers to participate in a Microfinance Study Tour in the Philippines. The Social Enterprise Development Partnerships, Inc. (SEDPI) facilitated the study tour entitled “Microfinance Immersion: Delinquency Management and A Study Tour of Philippine Microfinance Institutions” on May 6 to 11, 2013. The study tour was done in partnership with the Ateneo de Manila University (AdMU) and the Kasagana-Ka Development Center, Inc. (KDCI), two SEDPI’s long-time partners.

The main objective of the study tour is to give the participants the opportunity to be exposed to microfinance schemes and strategies in the Philippines that have proven to be successful; and, identify different approaches to delinquency management that would be practical and applicable to their current microfinance operations. In order to achieve this, the different components of the study tour include a Delinquency Management Training, a presentation on the Philippine microfinance experience, and visit to KDCI, one of the successful microfinance institutions (MFIs) in the country.

The participants were engaged in the participatory training course conducted by the key management staff of SEDPI. One of the participants commented that “everything were fine and appreciable. The presentation of the resource person was also admirable.” [sic] The senior officers of the development bank were also immersed on field and had interaction with microfinance staff and clients. The study tour was a venue to share current microfinance practices in the two countries—Nepal and the Philippines.

PasGBB is a microfinance bank currently operating under the Bank and Financial Institutions Act of Nepal. The main objective of the bank is “poverty alleviation of the rural poor through credit delivery system of the western region of Nepal.”[1] The bank operates in the rural regions of the country, which are the hard to reach areas for microfinance operations. Currently, PasGBB is cited as the most profitable regional rural development bank (RRDB) in Nepal.

Through the course, we realized the importance of addressing human resource concerns for the growth of the institution, said Edmar Sarmiento, one of the field managers of Kasagana Development Center Inc. (KDCI) who participated in the Managing Human Resource for Microfinance Institution training. The course, which was held last May 2 – 4, 2013, was delivered through the collaborative initiative of Ateneo – SEDPI, BPI Globe Banko and KDCI.

A total of 17 participants attended, all of whom are middle managers of their respective institution. The course highlighted the importance of organizational architecture and institutional culture as anchors in designing policies and systems for human resource development. The training also discussed the importance of incentive schemes in a growing and developing institution. Through the training, it is hoped that the participants will be able to increase their proficiency in handling their tasks as middle managers. As pointed out during the training, middle managers are in an intricate position within a microfinance institution because they act as mediators between the operations staff and the top management. A thorough understanding of the complexities of human resource development in lieu of growth will be provide them with skills and tools necessary to innovatively navigate their respective tasks.

One of the participants stated that they also wish to echo their learning, particularly on incentives and training needs, to their colleagues. All SEDPI trainers, Mr. Edwin Salonga, Ms. Enid Madarcos, Ms. Denise Subido and Ms. Florence Adviento were rated excellent in delivery, knowledge and overall skills as facilitators.

Aspiring to extend its reach to the greater majority of Filipinos, the country’s largest rural bank in terms of assets—Bank of Makati, Inc.—is tapping into the microfinance banking industry this year. To further enhance its capacity as a microfinance institution, Bank of Makati partnered with SEDPI for an 8-day management training conducted from April 29 to May 9, 2013.

The Branch Manager Microfinance Training Program was held at the BMI principal office in Makati, attended by 19 participants.  SEDPI delivered topics on fundamental principles of microfinance, delinquency management, character and capacity-based lending, financial analysis, and risk management. What is perhaps unique to SEDPI’s training program is its flexibility to suit the learning needs of its participants, catering even to those with minimal or no background in delivering financial products and services to small savers and, as BMI coined, the “new enterprising generation”.

All SEDPI trainers delivered interactive sessions. The discussions enabled an environment where participants can synthesize their own experiences and knowledge in banking and loans with newly imparted concepts. This was a crucial part in correcting some practices that are potential threats to organizational growth. Finally, all trainees underwent an examination to assess their technical skills in microfinance principles. Graduates of the program will receive a certificate of completion from the Ateneo de Manila University’s Development Studies Program.

SEDPI is proud to contribute to Bank of Makati’s mission in providing economic empowerment to more Filipinos. As its tagline reads, “Malalapitan, maaasahang kaibigan,” the bank’s new venture holds promise not only for the institution, but for its future microfinance clients as well.