Tag: microfinance

SEDPI KaNegosyo: Revolutionizing Microfinance in Mindanao

Bayugan City, Agusan del Sur – SEDPI KaNegosyo, a pioneer in microfinance, continues to set itself apart from conventional microfinance institutions with its innovative approach to financial services, particularly in the thriving communities of Mindanao.

Since its inception, SEDPI KaNegosyo has been on an impressive trajectory of growth. From a modest beginning with two branches and seven staff members in 2016, the organization has expanded to 15 branches spread across key regions including Agusan del Sur, Davao de Oro, Davao del Norte, Davao del Sur, Surigao del Sur, and Zamboanga del Sur, with a remarkable increase in staff strength to 127 as of October 2023. This expansion is a testament to the organization’s commitment to reach and uplift low-income groups.

The Operations Manager of SEDPI KaNegosyo, Elysil Claudel, highlighted the differences between SEDPI’s model and conventional microfinance (MF) during a recent presentation to representatives of the Land Bank of the Philippines. Unlike traditional MF, which often imposes penalties and continues to charge interest even when clients cannot pay due to unforeseen circumstances like calamities or illness, SEDPI KaNegosyo adopts a more compassionate approach. Their fixed service charge, absence of interest and penalties, and support mechanisms for business continuity, demonstrate a clear focus on the welfare and empowerment of their clients.

Moreover, SEDPI KaNegosyo’s objective diverges significantly from conventional MF. While the latter primarily aims at loan collection, SEDPI is dedicated to growing small businesses, showing a profound commitment to the entrepreneurial spirit of their clients. This philosophy is further exemplified in their innovative programs that encourage savings accumulation rather than continually growing loans of members, distinguishing SEDPI KaNegosyo as a leader in responsible and ethical microfinance.

The numbers speak for themselves, with a portfolio amount that has seen a staggering increase from PHP 1.67 million in 2016 to PHP 102.7 million in 2023, and number of nanoenteroprise joint venture partners that has grown from 1,828 to 19,197 in the same period.

Complementing its robust financial growth, SEDPI’s KaTambayayong program, a damayan scheme, showcases the organization’s dedication to community welfare and mutual aid. Since 2017, a total of PhP26 millio in benefits have been disbursed. As of October 2023, PhP5.44 million of assistance were given to 1,951 members and their families. Through KaTambayayong, SEDPI reinforces its commitment to a holistic approach, underscoring the value it places on the financial and social safety nets for its members, further cementing its role as a catalyst for inclusive development.

SEDPI KaNegosyo’s philosophy extends beyond mere financial transactions. It seeks to upend the traditional collateral-heavy and default-punitive systems of lending by tailoring its services to cater to the unique challenges faced by nano-enterprises. This approach embodies SEDPI’s mission to liberate clients from the vicious cycle of poverty and enable them to build a sustainable future.

With this innovative model, SEDPI KaNegosyo is not just providing financial services; it’s crafting a legacy of social empowerment, contributing to a more financially inclusive and resilient Mindanao.

About SEDPI: SEDPI is an organization deeply invested in the development of sustainable programs for financial inclusion, offering a suite of products and services designed to support the growth and resilience of microenterprises across the Philippines.

Elysil Claudel (facing back), SEDPI KaNegosyo Operations Manager, provides orientation to LBP representatives during their field visit to Bayugan Branch, Agusan del Sur.

Regulatory landscape of microfinance in the Philippines: An overview

Microfinance has emerged as a critical tool for poverty alleviation and financial inclusion in the Philippines. The government has recognized its potential and has enacted several laws and regulations to promote and regulate the sector (Llanto & Fukui, 2015). This paper examines the key regulations governing microfinance in the Philippines and their implications for the sector.

Covered institutions

In the Philippines, microfinance services are provided mainly by banks (mainly rural and thrift), non-governmental organizations (NGOs), cooperatives, financing companies and lending companies. The focus of regulation is on portfolio quality, outreach, efficient and sustainable operations, and transparent information. 

Banks with microfinance operations are under the regulation and supervision of the Bangko Sentral ng Pilipinas (BSP), cooperatives are under the supervision and the regulation of the Cooperative Development Authority (CDA) and microfinance NGOs, financing companies and lending companies are regulated by the Securities and Exchange Commission (SEC). 

Regulatory framework


The regulatory framework for microfinance in the Philippines is multi-faceted, involving several laws and regulatory bodies. The Republic Act No. 8425, also known as the Social Reform and Poverty Alleviation Act, is a landmark legislation that recognized microfinance as a key strategy for poverty alleviation (Congress of the Philippines, 1997). It mandated government financial institutions to allocate a portion of their loan portfolio for microfinance.

Republic Act No. 10693, or the Microfinance NGOs Act, provides a regulatory framework for non-governmental organizations engaged in microfinance activities (Congress of the Philippines, 2015). It established the Microfinance NGO Regulatory Council, which oversees the accreditation, regulation, and supervision of microfinance NGOs.

The Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, has issued several circulars related to microfinance. For instance, Circular No. 272 provides guidelines for the establishment of banks’ microfinance operations, while Circular No. 744 provides the framework for microfinance products and services (Bangko Sentral ng Pilipinas, 2001; 2013).

In 2010, an amendment to circular 694 was approved which recognizes from PhP150,001 to PhP300,000 to still be categorized as a microfinance loan (Bangko Sentral ng Pilipinas, 2010). This was done to accommodate the increasing demand for higher loan amounts from growing microenterprises. This policy increased the scope of those who can be microfinance clients, consequently increasing the potential market.

Sector-specific regulations

In addition to these general regulations, there are also sector-specific laws that mandate banks to allocate a portion of their loanable funds for specific sectors. The Republic Act No. 10000, or the Agri-Agra Reform Credit Act of 2009, requires banks to allocate at least 25% of their total loanable funds for agriculture and agrarian reform credit (Congress of the Philippines, 2009). Similarly, Republic Act No. 8550, or the Philippine Fisheries Code of 1998, mandates banks to set aside a portion of their loanable funds for fisheries development, which includes microfinance services for small fisherfolk (Congress of the Philippines, 1998).

Recent developments

The recent Republic Act No. 11494, or the Bayanihan to Recover as One Act, passed in response to the COVID-19 pandemic, includes provisions for low-interest loans for micro, small, and medium enterprises (MSMEs) and cooperatives, as well as loan payment grace periods (Congress of the Philippines, 2020). This act underscores the government’s recognition of the role of microfinance in economic recovery and resilience.

References

Bangko Sentral ng Pilipinas. (2001). Circular No. 272. Bangko Sentral ng Pilipinas.

Bangko Sentral ng Pilipinas. (2010). Circular No. 694. Bangko Sentral ng Pilipinas.

Bangko Sentral ng Pilipinas. (2013). Circular No. 744. Bangko Sentral ng Pilipinas.

Congress of the Philippines. (1997). Republic Act No. 8425. Official Gazette of the Republic of the Philippines.

Congress of the Philippines. (1998). Republic Act No. 8550. Official Gazette of the Republic of the Philippines.

Congress of the Philippines. (2009). Republic Act No. 10000. Official Gazette of the Republic of the Philippines.

Congress of the Philippines. (2015). Republic Act No. 10693. Official Gazette of the Republic of the Philippines.

Congress of the Philippines. (2020). Republic Act No. 11494. Official Gazette of the Republic of the Philippines.

Llanto, G. M., & Fukui, R. (2015). Financial inclusion, education, and regulation in the Philippines. Philippine Institute for Development Studies Discussion Paper Series.

SEDPI at 19: Pioneering change and empowering communities

Warm greetings to you all.
 
It fills me with immense joy and gratitude to stand before you on this significant occasion – the 19th anniversary of the SEDPI Group and the inauguration of our new headquarters in Rosario, Agusan del Sur. It’s wonderful to see so many familiar faces and new ones alike, as we come together to celebrate nearly two decades of dedication, progress, and shared accomplishments.
 


In reflecting on the history of the SEDPI Group, one cannot help but marvel at the extraordinary growth we have experienced. Since our inception in 2004, we have strived to make a significant impact in our communities, and the fruit of our labor is evident today. In just six years, since 2017, we have grown from 2 branches to a remarkable 15. A testament to the effectiveness of our mission and the unwavering commitment of our teams on the ground.
 
This growth is not merely in terms of our physical presence, but also in the size of the SEDPI family. Today, our membership stands close to 18,000 strong – a number that symbolizes not only the trust our members place in us but also our collective potential to effect change. Each of these members is a testament to our purpose, a driving force behind our mission to uplift lives and to champion sustainable and ethical financing, social investments, and financial education among Filipinos worldwide.
 
At the heart of our operations are our center chiefs, whose dedication and service have been instrumental in bringing our mission to life. Your tireless efforts, undying spirit, and constant dedication have made what SEDPI is today. It’s your commitment to our cause that has made it possible for us to achieve this feat. You are the backbone of our operations, and without you, SEDPI would not be what it is today. We salute your hard work and dedication.
 
We would not be where we are today without our esteemed institutional partners. From the world of academia, Ateneo de Manila University has been a valuable partner, providing us with a strong theoretical framework and research support to ground our work in science and evidence. In the banking sector, Land Bank and BPI have been instrumental in our financial operations, offering steadfast and dependable services that have allowed us to grow and serve our communities better. From the government sector, Pag-IBIG, SSS, and our newest partner, PhilHealth, have helped us secure access to social safety nets for our members, enhancing our services and creating a holistic approach to poverty alleviation.
 
Our staff is the lifeblood of SEDPI Group. You are the ones who bring our vision to life every day, facing challenges with creativity and resilience, and bringing compassion, professionalism, and dedication to your work. Each one of you plays a pivotal role in making SEDPI a beacon of hope for many. Your unwavering dedication and commitment are the life force that propels our organization forward.
 


As we look back on our journey, it’s essential to remind ourselves of the principles that form the cornerstone of SEDPI. Our six foundational principles – financial education, capital infusion instead of loans, profit and risk sharing, loss follows capital, non-profit insurance product, and partnership and cooperation – have been the guiding compass of our journey.
 
Financial education has been at the forefront of our initiatives. We believe that an informed individual is an empowered individual. By prioritizing intensive savings mobilization, universal insurance coverage, provision of investment opportunities, and liberation from oppressive loan products, we’ve been able to arm our members with the knowledge to make sound financial decisions and build a secure future.
 
Instead of offering traditional loans, we’ve introduced a novel approach to funding – capital infusion through joint ventures. This approach has enabled us to foster a mutually beneficial relationship with nanoenterprises. By adopting a cost-plus basis for our capital contribution, we’ve presented an alternative to the conventional loan systems that often burden the borrower with interest and penalty charges.
 
Our model of profit and risk sharing ensures an equitable distribution of profits and risks. Unlike traditional loan systems where the debtor bears all the risks, our shared approach fosters a culture of collective problem-solving and mutual support. This has led to a more resilient and empowered nanoenterprise ecosystem.
 
The principle of ‘loss follows capital’ ensures that losses are proportionate to each party’s capital contribution. This approach is more equitable and just, significantly differing from traditional loan systems where the debtor often bears the brunt of the losses.
 
Our non-profit insurance product is designed with the primary goal of solidarity and protection. By treating service delivery costs as expenses and accumulating surplus premium payments to strengthen the fund, we’ve ensured that the insurance serves its true purpose of providing protection and not income generation.
 
Our commitment to partnership and cooperation has led us to establish collaborations with government agencies, bringing basic services closer to low-income groups. We’ve joined hands with civil society and like-minded organizations in our fight against poverty, reinforcing our belief that collective efforts can bring about significant change.
 
The essence of our principles aligns seamlessly with the UN Sustainable Development Goals (SDGs), transforming our local efforts into a contribution to a global cause. Our initiatives address a wide range of SDGs – from eradicating poverty to ensuring decent work and economic growth, reducing inequalities, promoting sustainable cities and communities, and ensuring good health and well-being.
 
Through our initiatives, we’ve made significant strides towards achieving these global goals. By providing capital and financial education, we’ve uplifted numerous entrepreneurs from the shackles of poverty. By facilitating job creation and sustainable microenterprises, we’ve fostered economic growth and reduced inequalities. Our housing initiative, KaBalay, has contributed to creating sustainable cities and communities, while KaLusog, our health initiative, has promoted good health and well-being.
 
Our approach to finance, marked by capital infusion and profit-sharing rather than traditional loans, promotes responsible consumption and production. By fostering partnerships and cooperation with government agencies, we’re reinforcing strong institutions. Most significantly, by targeting primarily women, SEDPI is making significant strides towards achieving gender equality in financial inclusion and economic empowerment.
 
As we stand at this juncture, celebrating our past and looking forward to our future, we’re filled with a sense of optimism and determination. We’re ready to tackle new challenges, seize opportunities, and continue our mission to uplift lives. We’re eager to expand our outreach, strengthen our services, and make a more significant impact.
 
Thank you all for your unwavering support and commitment to our cause. The journey we’ve traversed and the journey that lies ahead are both testaments to our shared vision, collective efforts, and our belief in making a difference. As we embark on the next chapter of our journey, let’s continue to aspire, inspire, and make an impact.
 
Maraming Salamat, Mabuhay!

Philippine microfinance industry estimates

The Bangko Sentral ng Pilipinas (BSP) defines microfinance as the provision of a broad range of financial services such as deposits, loans, payment services, money transfers and insurance products to the poor and low-income households, for their microenterprises and small businesses, to enable them to raise their income levels and improve their living standards.[1] It is also defined as the provision of financial services to low-income clients, including the self-employed.

Who is a microfinance client?

Typical microfinance clients are low-income persons that do not have access to formal financial institutions. Microfinance clients are typically self-employed, often household-based entrepreneurs. 

In rural areas, they are usually small farmers and fisher folk, as well as others who are engaged in small income-generating activities such as food processing and petty trade. In urban areas, microfinance activities are more diverse and include shopkeepers, service providers, artisans, street vendors, and others.[2]

Microfinance products

Financial products of microfinance used to be limited to savings and credit. Several financial services have sprung up in the past decade to address the other financial services needs of microfinance clients like insurance, remittance and even housing services.

Loans that are up to PhP150,000 used for consumption or productive purposes are classified as microfinance loans as stated in government’s Social Reform Agenda or Republic Act 8425 of 1997. The same amount is set as the maximum capitalization for microenterprises.

For microhousing loans, the Bangko Sentral ng Pilipinas (BSP) set the ceiling to PhP300,000 although the Housing and Land Use Regulatory Board (HLURB) classifies socialized housing at PhP450,000.

Government policy

The National Strategy for Microfinance envisions a viable and sustainable microfinance market that will help provide poor households and microentrepreneurs with greater access to microfinance services.

It calls for a greater role for the private sector and the non-participation of government line agencies in the provision of credit and guarantee programs. Emphasis is on the adoption of market oriented financial and credit policies to ensure viability and sustainability.[3]

It is worthy to note that the Philippines closed the gender gap in terms of financial inclusion[4] which is largely attributed to microfinance institutions.

Players, portfolio and number of clients

There are approximately 6,183 microfinance institutions in the Philippines. 

Microfinance institutionNumber
Banks (2022)[5]139
Cooperatives (2020)[6]2,762
Microfinance NGOs (2022)[7]27
Financing companies (2017)[8]673
Lending companies (2017)[9]2,582
Total6,183

The microfinance industry in the Philippines has grown into a PhP406 billion industry in terms of loan portfolio as of March 2022. [10] This would be larger if the portfolio from financing and lending companies that also mostly qualify as microfinance loans are added. the figure also

Microfinance institutionAmount of portfolio in billion pesos
2022 1Q202120202019201820172016
Banks 26.8  27.7  26.6  27.2  22.6  17.1  13.7 
Cooperatives 327.1*  327.1*  327.1  315.8  315.8  194.1  167.4 
MF NGOs  52.8  52.8  50.4  41.9  30.9  28.6  20.6 
Total 406.7  407.6  404.1  384.9  369.3  239.8  201.7 

* Carried over from 2020 figures, due to lack of updated data from the Cooperative Development Authority, to come up with a reasonable estimate of the total outstanding loans of the industry.

There are 18.2 million recorded microfinance clients in the banking system, Microfinance NGO and cooperative sectors.[11] In SEDPI’s research with various microfinance institutions, it is common for a client to have multiple memberships. In fact, a typical microfinance client has average membership in two to three microfinance institutions.

To estimate the number of microfinance clients served, the total number is multiplied by a factor 0f 50% to account for multiple memberships. This would bring the estimated number of microfinance clients in the industry to 9.1 million as of the first quarter of 2022.

Microfinance institutionNumber of clients/members
2022 1Q202120202019201820172016
Banks 1,985,422  1,978,394  1,996,657  2,410,677  1,986,683  1,956,276  1,686,152 
Cooperatives 9,900,000*  9,900,000 * 9,900,000  9,800,000  9,500,000  9,400,000  8,000,000 
MF NGOs  6,400,000  6,200,000  6,400,000  6,200,000  5,200,000  4,300,000  3,900,000 
Total 18,285,422  18,078,394 18,296,657 18,410,677 16,686,683 15,656,276 13,586,152 
50% of total 9,142,711  9,039,197  9,148,329  9,205,339  8,343,342  7,828,138  6,793,076 

* Carried over from 2020 figures, due to lack of updated data from the Cooperative Development Authority, to come up with a reasonable estimate of the number of microfinance clients in the industry.

Based on the above figures, the average loan size per client in the industry is PhP22,000 as of the first quarter of 2022. Microfinance NGOs have the lowest average loan size at PhP8,250 which makes them reach the bottom of the pyramid. Cooperatives have the highest average loan size at PhP33,000 since most cater to salaried workers as well as farmers and microenterprises that require larger loan amounts. The average loan size for rural banks is PhP13,500.

Industry growth

Growth in microfinance portfolio was robust from 2017 to 2019, the pre-pandemic period, which registered 14% to 37% loan portfolio growth rate and 11%-16% member growth rate. Slight growth in loan portfolio was recorded in 2020 at 7% and remained flat in 2021 that registered only 1% loan portfolio growth.

Microfinance institutionGrowth in microfinance portfolio
20212020201920182017
Banks4%-2%20%32%25%
Cooperatives0%6%11%42%16%
MF NGOs 5%20%36%8%39%
Total1%7%14%37%19%

Number of clients had healthy growth rates from 2017 to 2019 which is ranged from 11% to 16%. On 2020 to 2021, the peak of the pandemic period, negative growth were recorded in terms of number of clients at -1% for each year. 

Microfinance institutionGrowth in number of clients
20212020201920182017
Banks-1%-17%21%2%16%
Cooperatives0%1%4%18%11%
MF NGOs -3%3%19%21%10%
Total-1%-1%11%16%11%

[1] BSP Circular No. 272, 30 January 2001

[2]Salonga, Edwin, “Microfinance: An Empowerment Tool for the Enterprising Poor,” October 8, 2003.

[3] Frequently Asked Questions on Microfinance, Bangko Sentral ng Pilipinas website

[4]https://public.tableau.com/views/MGIGendertableau/Dashboard1GPS?:embed=y&:showVizHome=no&:display_count=y&:display_static_image=y&:bootstrapWhenNotified=true

[5] bsp financial inclusion dashboard 220331

[6] bsp financial inclusion dashboard 220331

[7] list of sec accredited microfinance ngos 2022 221027

[8] list of financing companies with certificate of authority 171231

[9] list of lending companies with certificate of authority 171231

[10] Dashboard: Financial Inclusion in the Philippines, Bangko Sentral ng Pilipinas, December 2020

[11] Based on BSP financial inclusion dashboard and SEDPI multiple membership estimates

SEDPI at Opisina ni Senator Risa Hontiveros Nag-abot ng Tulong sa mga Nasalanta ng Bagyong Vicky

“Sagol nerbyos hadlok lagi kay basi manganaod kay paspas kaayo ang pag taas sa tubig og sulod kaayo.” 

“Magkahalong nerbyos at takot dahil baka maanod kasi mabilis ang pagtaas ng tubig at pumapasok talaga.”

Ito ang naramdaman ni Roxanne Amigo habang rumaragasa ang baha na dala ng bagyong Vicky.

Kasama sa binaha at na-landslide ang mga residente ng Agusan del Sur at Surigao del Sur, kung saan mayroong microfinance operations ang SEDPI Development Finance, Inc.

Mula sa 10,000 SEDPI members, 1,884 ang apektado sa mga bayan ng Trento, Santa Josefa, Barobo, at Rosario sa Agusan del Sur at Lingig at Bislig sa Surigao del Sur. Dalawa ang inanod ng baha ang bahay. Isa naman ang na-landslide. 

Agad nakapagbigay ng relief goods noong December 2020 ang SEDPI at ang Office ni Senator Risa Hontiveros sa nasalanta ng bagyong Vicky.

Hindi man madalas na mabagyo ang Mindanao, naging handa ang SEDPI sa pagtulong sa mga members dahil sa Social Welfare Protection Program (SWEPP) nito. 

SWEPP ay ang hybrid microinsurance program ng SEDPI na pinagsasama ang “damayan” o pagtutulungan ng kapwa; formal life insurance mula sa CLIMBS Life and General Insurance Cooperative; at social safety nets mula sa gobyerno na binibigay ng SSS at Pag-IBIG Fund. 

Maliban sa regular contributions sa SSS at Pag-IBIG, nagcocontribute ang mga members ng PhP360 every six months para ma-cover ng SWEPP. 

Ang bahagi ng kontribusyon ay linalaan para sa “damayan”. Ginagamit ang naiambag ng mga members para tulungan ang kamember nila sa panahon ng kamatayan, pagkakasakit, sunog, o kalamidad. 

Ito ang naging pondo para makabigay ng relief goods sa mga nabaha at dagdag na PhP5,000 sa tatlong na-wipe out ang bahay.

Bawat pack ng relief goods ay naglaman ng limang kilong bigas at ilang groceries na good for one week para sa pamilya na may limang miyembro.

“Naibsan ang pag-aalala ko dahil may makakain na kami kahit papano. Dumating ang aming pinapanalangin,” masayang nasabi ni Roxanne. 

Naging malaking tulong ang donasyon na 134 sakong bigas na galing sa Liwanag at Lingap Program ng opisina ni Senator Risa Hontiveros. 

Ang programang ito ay nagsimula noong bagyong Rolly bilang isang typhoon relief effort. Sinundan pa ito ng tulong sa mga apektado ng mga bagyong Ulysses at Vicky. 

Mensahe ni Senator Risa Hontiveros, “Tuloy-tuloy ang pagpapadala natin ng Liwanag at Lingap sa mga kababayan nating naapektuhan ng kalamidad at nawalan ng kabuhayan. Umaasa akong sa munting paraan ay makatulong ang relief operations na ito para matugunan ang immediate needs gaya ng pagkain.” 

Naging maganda ang pagtutulungan ng komunidad, SEDPI at ng opisina ni Senator Risa Hontiveros. Sa unang linggo matapos ang bagyo at baha ay nakatuon ang mga nasalanta sa pag-aayos sa kanilang mga bahay at gamit at hindi sa paghahanap ng kanilang makakain. 

Ani ng Vince Rapisura, Presidente ng SEDPI, “Systemic and institutionalized safety nets talaga ang kailangan natin. Kailangan po talaga ay hindi lang yung sarili natin yung nag-eeffort pero nandyan ang private sector, nandyan ang public sector, nandyan ang community.” 

 

 

 

 

 

 

SEDPI at Ambagan PH Tumulong sa mga Nasalanta ng Bagyong Vicky

Agad na nag-abot ng tulong ang SEDPI at Ambagan PH sa 1,884 na nasalanta ng bagyong Vicky sa Agusan del Sur at Surigao del Sur. 

Matapos ang tuloy-tuloy na ulan na dulot ng bagyong Vicky sa Mindanao nagdulot ito ng pagbaha at landslide. 

Kasama sa naapektuhan ay ang mga residente ng Agusan del Sur at Surigao del Sur, kung saan mayroong microfinance operations ang SEDPI Development Finance, Inc. 

Mula sa 10,000 SEDPI members, 1,884 ang apektado sa mga bayan ng Trento, Santa Josefa, Barobo, at Rosario sa Agusan del Sur at Lingig at Bislig sa Surigao del Sur. Dalawa ang inanod ng baha ang bahay. Isa naman ang na-landslide.

Bago pa mabagyo ang Mindanao, naging handa ang SEDPI sa pagtulong nito sa mga nasalanta dahil sa Social Welfare Protection Program (SWEPP). 

SWEPP ay ang hybrid microinsurance program ng SEDPI na pinagsasama ang “damayan” o pagtutulungan ng kapwa; formal life insurance mula sa CLIMBS Life and General Insurance cooperative; at social safety nets mula sa gobyerno na binibigay ng SSS at Pag-IBIG Fund. 

Maliban sa regular contributions sa SSS at Pag-IBIG, nagcocontribute ang mga members ng PhP360 every six months para ma-cover ng SWEPP. 

Ang bahagi ng kontribusyon ay linalaan para sa “damayan”. Ginagamit ang naiambag ng mga members para tulungan ang kamember nila sa panahon ng kamatayan, pagkakasakit, sunog, o kalamidad. 

Pondo mula sa SWEPP Damayan ang pinagkuhanan para sa relief goods sa mga nabaha at dagdag na PhP5,000 sa tatlong na-wipe out ang bahay.

Ani ng Vince Rapisura, Presidente ng SEDPI,“Ito ay isang patunay na ang mahihirap ay kaya nilang tulungan ang mga sarili nila kung merong maayos na sistema at hindi kinukurakot.” 

Nadagdagan ang pondo para sa relief operation nung nag-donate ang Ambagan PH sa SEDPI Foundation, Inc. ng PhP20,000.

Ang Ambagan PH ay isang network ng volunteers at initiatives na nabuo para tumugon sa mga krisis, tulad ng bagyong Vicky. Donasyon at crowdsourcing ang pangunahing pinagmumulan ng kanila resources. 

Sa karanasan nila mula ng October 2020 na-realize nila na, “Walang maliit o malaking ambag. Sa panahon ng krisis, lahat ng ambag ay dakila.”

Bawat pack ng relief goods na napamigay ng SEDPI at Ambagan PH ay naglaman ng limang kilong bigas at ilang groceries na good for one week para sa pamilya na may limang miyembro.

Pasalamat ng SEDPI member na si Dondon Ocsema, “Malaking tulong iyon para suportahan ang ilang araw na kakainin lalo na ilang araw akong hindi nakapamasada.”

Dahil meron na silang makakain para sa isang linggo mas nabigyang tuon ng mga nasalata, tulad ni Dondon, ang pag-aayos sa kanilang mga bahay at gamit. 

Isa itong full-circle experience para kay Angelica Reyes o Anj na SEDPI Senior Program Officer at Co-Founder at Spokesperson din ng Ambagan PH. 

Nagsimula ang 2020 nang mag-interview si Anj, kasama ang iba pang taga SEDPI, ng members sa Agusan del Sur at Surigao del Sur para malaman ang impact ng microfinance program. 

Anj Reyes kasama ang ilang SEDPI members nung February 2020

Nagtapos ang taon na pinagtagpo ni Anj ang SEDPI at ang sinimulan niyang grupo na Ambagan PH para tumulong sa mga taong minsan ay nakadaupang-palad niya.

“Malaki ang pasasalamat ko sa SEDPI dahil marami sa organizational at administrative skills ko ay natutunan ko mula sa pagiging program officer ng SEDPI. Higit sa lahat, lalong napatibay ng SEDPI ang advocacy ko na makatulong sa kapwa.” – Angelica Reyes

Para sa mga gustong mag-ambag, pumunta lang sa facebook.com/ambaganph at i-click ang sign up link.

 

 

 

 

Agrarian Reform Beneficiaries in Sultan Kudarat Receive Millions Worth of Agri-Inputs from DAR – IARCDSP

Pandemic or not, farmers in Mindanao tirelessly till the soil. This is why the Department of Agrarian Reform, together with SEDPI, continue to work while majority of the population are on a standstill to bring the most awaited agri-input investments from the DAR – Italian Assistance to ARC Development Support Program (IARCDSP) to our farmers. 

Five (5) Agrarian Reform Beneficiaries and Farmers Organizations in Sultan Kudarat received the first tranche of the promised agricultural inputs that shall kickstart their agricultural businesses supporting farmers in their Agrarian Reform Communities (ARC).

Josephine Balicaw, officer of Marguez United Irrigators Farmers Association (MUIFAI) in Pag-asa ARC, couldn’t help but shed tears when around PhP1.5M sacks worth of inputs were unloaded from a 10-wheeler truck and brought to what was once an empty warehouse. They have been preparing for this through the capacity interventions of SEDPI and now the moment has come for them to put theory into action. 

 

Josephine Balicaw, third from left, together with other officers and members of Marguez United Irrigators Farmers Association in Pag-asa ARC.

In the same way, Noria Gapor, officer of Sigay Ka Tamontaka 4 Association (SKTFA) from Kutawato ARC, was reeling with disbelief when she was told that all the sacks were to be offloaded and not brought elsewhere. “Akala ko ilang sako lang para sa amin. Lahat pala!” (I thought we’re only getting a few sacks of inputs but we’re getting them all!), said Gapor.

It is quite an emotional experience as well for our farmers in Naldan Creek Irrigators Association (NCIA) in Lambayong ARC, Kalayaan Communal Irrigators Association (KCIA) in Lutayan ARC, and Taguisa Agrarian Reform Beneficiary Multi-Purpose Cooperative (TARBMPC) in Lebak ARC. For these ARBOs, now that the inputs are here, they will be able to provide farmer-friendly agri-input financing, farm machineries rental, and hauling services to fellow farmers in their community.

This is one of the foreign- assisted projects being implemented by the Department of Agrarian Reform and funded under the loan agreement executed with the Government of Italy. This project involves not only millions worth of agricultural inputs, farm machineries and equipment, hauling trucks, but also intensive capacity building training on microfinance management tools and monitoring & evaluation systems spearheaded by SEDPI. 

There is a total of 35 Agrarian Reform Beneficiaries/Farmers Organizations involved in the DAR – IARCDSP Project covering Sarangani, Sultan Kudarat, Maguindanao, and Lanao del Sur Provinces. 

 

SEDPI’s Group Yearly Renewable Term Insurance

SEDPI offers Group Renewable Term Insurance (GYRT) in partnership with CLIMBS, a service more catered to common Filipino households.

Term insurance provides protection against emergencies for a specific period of time. As lifetime coverage is not always needed, term insurance provides cheaper premiums with larger benefits. On average, investment-linked insurance schemes charge PhP80,000 in premiums.

For the same PhP1 million coverage, individual term life insurance premiums can be as low as PhP5,500 for ages 21-30 and cap around PhP21,000 for ages 51-60. SEDPI’s Group Yearly Renewable Term has PhP500,000 life benefits and PhP500,000 accident benefits. For ages 18-60, the premium is PhP4,000. This makes it even more affordable compared to individual term insurance policies. Due to its affordability, participation in group insurance is high.

Group insurance means that one contract is issued to cover a group of people. In this case, SEDPI is the policyholder. As a SEDPI member, one is entitled to access this group insurance program, even if they are abroad.

OFWs dealing directly with Philippine-based insurance agents are constrained by a lack of international selling licenses. Since SEDPI is the policyholder an directly deals with CLIMBS, OFWs can participate in the insurance program. Eligibility is determined by membership to SEDPI, and the process does not require rigorous underwriting due to the large number of members.

Yearly Renewable insurance indicates that the insurance protection coverage is active for one year. The annual premium must be paid in order to restart coverage for the following term.

The group’s performance based on mortality rates is evaluated each year. A higher mortality rate may mean a higher adjusted premium the following year, but a lower mortality rate than average can lead to a lower premium for the group.

SEDPI members in Mindanao have exhibited lower mortality rates, and SEDPI is in negotiations with CLIMBS to lower the premium for this group.

Enter keyword GYRT on Vince Rapisura’s Facebook messenger to join.

SEDPI’s Social Welfare Protection Program

SEDPI offers the Social Welfare Protection Program (SWePP), where members can avail microinsurance coverage for their families in the Philippines or themselves. SWePP is a consolidated microinsurance and social safety net program and provides security and protection to low-income SEDPI members.

As a hybrid form of insurance, it adopts formal, informal, and government social insurance programs. It partners with a formal insurance provider, has a damayan portion, and also partners with government agencies – Social Security System (SSS) and Home Development Mutual Fund’s Pag-IBIG or Pag-IBIG.

SEDPI serves to make government services more available to poorer communities. Low income households, which make less that PhP240,000 a year; microenterprises such as farmers and fisherfolks, and OFW family members are recommended to get SWePP.

SWePP provides (1) CLIMBS Life Insurance, (2) access to SSS and Pag-IBIG, and (3) Damayan for fire and calamity assistance. SEDPI is in talks with PhilHealth to include health insurance in the future.

SWePP benefits include up to PhP80,000 life and accident insurance from CLIMBS; and PhP5,000 for fire protection and PhP500 worth of relief goods from the damayan component. These benefits are offered for an annual membership fee of PhP720.

SEDPI is an accredited collection agent of SSS, meaning that payments can be remitted through SEDPI to be paid to the SSS. Becoming a member of the SSS and making one contribution entitles members to a PhP20,000 death benefit. The minimum contribution is PhP360.

For a one time payment or contribution, SSS provides lifetime benefit of funeral protection. With three contributions per year, members are eligible for sickness and maternity benefits.

If a member makes 36 payments before the age of 65, they are given lifetime coverage for disabilities as well as additional death benefits. If a member makes 36 payments, then up to the age of 60, they can also enjoy unemployment benefits.

Making 36 to 119 contributions will gain the benefit of a lump sum pension. Making at least 120 contributions will give the benefit of monthly pensions. Vince Rapisura, SEDPI Group President, recommends that members aim to make approximately 500 contributions to their SSS. More contributions equal higher pensions.

SEDPI’s is also an accredited collection agent of Pag-IBIG. When one becomes a member of Pag-IBIG, one contribution every six months provides a PhP6,000 death benefit.

Pag-IBIG is a complement to retirement funds of Filipinos because of its high dividends. As the national savings program of the government, members are eligible to receive their total accumulated value, which is equivalent to personal contributions, employer contributions, and your dividends. The returns are promising, and they compound.

Pag-IBIG also grants access to socialized housing loans at a 3% per annum interest rate, up to a maximum of PhP580,000. OFWs are charged market rate, but this amount typically hovers around 5% – 7% per annum. Up to PhP6 million can be loaned.

For its microfinance operations in Mindanao, SEDPI is planning socialized housing projects for its members in partnership with Pag-IBIG. It has already acquired 7.1 hectares of land and is in the process of acquiring 4 hectares more in the provinces of Agusan del Sur and Surigao del Sur. Construction and development are planned for 2021.

What qualifies as microinsurance in the Philippines?

Insurance involves pooling risk over a large number of similar units such as households, persons, or businesses. It protects people and businesses against financial loss by spreading their risk among large numbers, and is similar to the concept of “bayanihan.”

Insurance is not an investment. You are not after financial gain. It is for protection against financial losses and involves exchanging the uncertain prospect of large losses for the certainty of small, regular premium products.

Term life is benefits paid to beneficiaries upon death. It is typically recommended for the breadwinners or those with dependents. Disability insurance is benefits paid to beneficiaries upon disability. Credit insurance ensures that loan principal and interest is paid by the insurance company upon death, rather than your estate.

Crop insurance offers protection against poor crop yields as well as recovery benefits from natural disasters. It is mainly utilized by farmers. Health insurance covers medical costs for illnesses and injuries. Property insurance covers damage, destruction, and theft of household assets. Business owners can also insure inventory and equipment at their stores and warehouses.

According to the Republic Act 10607 Amended Insurance Code, microinsurance is defined as meeting the risk protection needs of the poor. The “micro-” places emphasis on the fact that those with smaller incomes are the target policy holders. OFW’s can purchase microinsurance for loved ones back home so that the burden of having to personally absorb risk when loved ones are exposed to risks.

Furthermore, the premiums, fees, and charges of microinsurance do not exceed 7.5% of the policyholders’ current daily minimum wage. This means that for a daily income of PhP 570, the premium will not exceed ~PhP 15,600 for the year. The current benefits will not exceed x1000 the daily minimum wage, equivalent to PhP 570,000 to continue to be called a microinsurance.

Formal insurance is insurance provided by insurance corporations and co-operations and are regulated by the insurance commission. Although both corporation and co-ops are “for profit’ setups, co-ops are owned by the members. Rapisura recommends Mutual Benefit Associations (MBAs) or cooperative insurance, as it prioritizes the welfare of the people over the generation of profits.

Informal insurance refers to collectives such as damayan-based schemes, where insurance is a non-profit community endeavor. Hybrid insurance is a combination of formal and informal insurance. Public insurances are the social safety nets provided by the government such as the Universal Health Care Act and PhilHealth.