PinoyME Annual Report 2009

“PinoyME sees itself as a catalyst, innovator and facilitator. We look at microfinance as an
industry, try to analyze gaps and design interventions with MFIs so that we are confident of their
relevance. We also try to bring in non-MF individuals and groups that have expertise in addressing
identified gaps. These organizations and individuals bring in new perspectives and new resources
into the sector. With them and with the MFIs, we try for solutions that are market oriented, to
minimize subsidy and ensure sustainability.”
Dan Songco, President and CEO
PinoyME Foundation
PinoyME Secretariat
Unit 602 Manila Luxury Condominium Pearl Drive corner Gold Loop Ortigas Center, Pasig City
Phone: Fax: Email: Website:
635-4937, 635-6387, 638-2851
634-0249
[email protected]
www.pinoyme.com
PinoyME Year 4 Annual Report
PinoyME (“Filipino Microenterprise”)
is a gathering of leaders from the
business, academic, and social development
sectors. It aims to reduce poverty in the
Philippines by bolstering microfinance and
micro-entrepreneurship. The PinoyME
Foundation is its social investment
banking arm.
Contents
1-2
FORGING TIES
Toward Sustainable Enterprises for the Poor
3-4
DRAWING BATTLE LINES
A “GPS” for Philippine microfinance
and micro-enterprise
5-8
CAPACITY BUILDING
Providing a Pool of MF Human Resources
9-10
MICROENTERPRISE SUCCESS STORIES
The Difference that Credit Makes
11-14
KNOWLEDGE MANAGEMENT
Using Information to Empower
15-16
MICROENTERPRISE SUCCESS STORIES
The Difference that Credit Makes
17-20
BUSINESS DEVELOPMENT SERVICES:
A Forum for New Threads of Talk
21-22
MICROENTERPRISE SUCCESS STORIES
The Difference that Credit Makes
23-28
RESOURCE MOBILIZATION
The PinoyME Foundation
Stronger Ties for Sustainable
Enterprises for the Poor
Pin oyMe : Y ear 4
Annual Report 2009
Message
Forging Ties: Toward Sustainable Enterp
When she called, how could anyone have said no?
For PinoyME, the iconic Corazon Aquino was the “tie that binds.”
Only she could have brought together such a gathering of leaders
from diverse spheres. Only she could have summoned us to work
together for what she saw as another revolution: freeing the Filipino from poverty through microfinance.
That singular gift for bringing people together is probably Tita
Cory’s most profound legacy. For the microfinance industry, her
entry was a partnership game-changer. There was almost nothing
that the ribbons of her influence could not bind. She made possible
tie-ups across a startling swath of sectors. She made possible
tie-ups that created national stir. She made possible tie-ups of a
most adventurous kind, the kind needed to eventually connect a
marginalized industry to the mainstreams of national life.
And so through the past 4 years, PinoyME has also come to play
the role of its founder. It has catalyzed and facilitated partnerships
to address what MFIs have pointed out as gaps in the industry.
Because of the search for sustainable and market-driven solutions,
these partnerships have taken unusual and adventurous forms,
engaging players in “mainstream” industries and sectors not usually
involved in microfinance. Thus, we have MFIs tying up with
universities, tiny rural enterprises linking up with large urbanbased businesses, MFIs touching base with prominent bankers,
local MFI networks working with a national consortium… the
combinations are many and varied.
These tie-ups are bearing fruit in creative innovations, many of
which are being incubated and tested.
1
To help MFIs develop more funding options, PinoyME partners
have developed an innovative portfolio of financial services.
This includes: a credit line with a standing loan portfolio of
P65 million, a financial advisory “help-desk” where MFIs can
consult with bankers and other financial experts, and a social
investment fund through which the general public can support
viable rural enterprises.
To respond to the need for qualified microfinance personnel,
PinoyME partners are designing and testing university courses
for loan officers, MFI supervisors and branch managers.
To generate more information on the industry, PinoyME partners
have assembled something like a “MiFIpedia”: a compendium of
data on various important areas of inquiry.
To help create the necessary policy environment in the next
administration, PinoyME partners have crafted a microfinance
policy agenda to be presented to the 2010 presidential
candidates.
Finally, to help MFIs help their MEs access mainstream markets, PinoyME has convened a Business Development Services
consortium, and has forged links with corporations, business
organizations and networks to set up conferences and “market
encounters” with the micro-entrepreneurs.. These encounters
have helped tiny rural enterprises clinch supply contracts with
mainstream business ventures. They have also opened windows
to corporations interested in “doing business at the base of the
pyramid.”
prises for the Poor
All of this has been exciting, but
arduous work. PinoyME’s fourth year
was not spared from the challenges of
implementation, nor from the long,
patient nurturing that partnershipbuilding requires.
With Tita Cory’s passing in August of
2009, the work of the consortium
becomes that much harder.
But she leaves with us her vision:
that of making enterprise a truly viable
and sustainable option for the poor.
She leaves with us with her spirit: her
unwavering faith in the Filipino, her
unwavering hope in the power of
collaboration.
Her memory alone is enough to remind us,
again and again, that when Filipinos forge
ahead together, revolutions have been
known to happen.
The PinoyME Steering Committee and
Board of Trustees of PinoyME Foundation
Photo Source:TIME Magazine
2
Drawing New Battle Lines
PinoyME’s research and policy circle navigates the changing landscape of microfinance (MF), and
produces this working “GPS” for the microfinance explorer.
Microfinance first created a stir in Bangladesh in the 1970s. Today it reaches more than 100 million poor people worldwide,
through a combined portfolio of $15 billion. Designed to address poverty, microfinance increases income and human capital
stock, rendering the poor less vulnerable to internal and external shocks (such as natural calamities and disasters).
The biggest impact of microfinance has been in the area of helping the poor “smoothen” their consumption patterns.
Livelihood made possible through microfinance help the poor increase their income, which, in progression, is spent to increase
food consumption, attain better education, maintain good health, improve housing conditions, and acquire assets.
In the Philippines, government figures indicate that microfinance now reaches 5 million individuals through the services of 500
microfinance institutions (MFIs) with a combined portfolio of P12 billion.
Commercial Character
Not enough for the rural poor
Because of its effectiveness and profitability, microfinance has
penetrated the financial system as a viable investment vehicle.
Even investors from capital markets have been drawn.
Majority of microfinance funds have gone to urban areas in
the richest parts of the country. Comparatively little has gone
to the poorest provinces. In fact, recent studies indicate that
most microfinance clients are not poor, by official definition.
This has helped proponents rapidly increase their outreach to the
poor. These investments also facilitate the MFIs’ drive for scale,
enhancing competition, which in turn spurs operational efficiency
among competitors.
At the same time, the demand for higher return on investments
is pushing MFIs to focus more on profitability, with poverty
reduction taking a secondary role.
Private business involvement
The unique character of microfinance is that it is not dependent
on direct subsidy. It also facilitates the participation of the private
sector in efforts to reduce poverty, which leaves government with
more resources to address the basic needs of the poor.
Emerging corporate ventures with micro-entrepreneurs, driven
by corporate social responsibility (CSR), can serve as a strategic
investment. The cost subsidy may eventually recede and the
profitability of these ventures may rise as the business achieves
economies of scale.
3
Thus, microfinance has so far been an urban phenomenon
that finances largely retail/trading microbusinesses. Because
70% of the poor in the Philippines are in the rural areas, the
challenge to MF practitioners is to reach the rural,
agriculture-based poor.
Microfinance plus”
Many MFIs have diversified their services to include micro
insurance, micro housing, and business development
services (BDS). This trend is a result of their sensitivity to
client needs—something that happens as MFIs experience
success in client repayment. Delivery of BDS, in particular,
is a response to the demand for more sustainable enterprise.
Thus, microfinance is evolving into microenterprise development, which combines financial and
non-financial services to help the poor enter the formal economy. However, whether MFIs should move
away from micro-credit and savings (their key areas of comparative advantage) remains a subject of debate.
The need for structural reform
Studies have shown that lack of access to markets and lack of access to capital are two of the major causes
of poverty in the world. Microfinance and microenterprise development have the potential to address these
causes of poverty.
However, while microfinance evolves in a market-environment through commercialization, MFIs may tend to
cater only to clients that provide bigger returns, leaving others marginalized. Hence, the government has to
design structural reforms that provide social safety nets.
Therefore, the key to harnessing the full potential of microfinance as a poverty reduction tool lies in two
simultaneous efforts: putting microfinance in the context of addressing the structural problems that deepen
poverty, and propagating it as a sustainable vehicle for financial intermediation.
Key Directions
For microfinance, then, to contribute more toward poverty reduction in the Philippines, the key
challenges are to:
(1) increase the reach to more poor people, particularly
those in the rural, agricultural communities,
(2) promote the integration of microentrepreneurs into
the mainstream market,
(3) ensure that MFIs are profitable and at the same time
create impact in reducing poverty among their clients, and
(4) increase the access of the poor to formal financial
services.
These challenges can only be met through multi-stakeholder partnerships. By helping
to broker such ties, PinoyME hopes to help advance the microfinance battle along new
and strategic lines.
4
CAPACITY BUILDING
Providing a Pool of MF Human Resources
The PinoyME Capacity-Building working group was formed to address the key management and training needs of MFIs so that they will
be able to run more efficiently, scale up their efforts, and reach more of the poor. It thrives on the rich collaboration of MFIs, national and
regional MFI networks and councils, members of the academic community in different parts of the country, training experts, and resource
providers. It is convened by Prof. Ronald Chua, microfinance champion of the Asian Institute of Management.
The New Kids in School
something that will enable practically any TESDA accredited
school in the country to offer it in the future.
Going to school to become a microfinance loan officer?
“This initiative is possibly a first in the country, and possibly
among the first globally,” says Prof. Ronald Chua, chair of the
PinoyME working group on capacity-building.
That is what some students are now doing at Bicol University in
Daraga, Albay. Enrolled in a test run of a new pilot course on
campus, these young men and women hope to earn a certificate in
microfinance after two years, then find work as a loan officer with
any of the region’s MFIs—some of which are just waiting to employ
them. Down the line, it just maybe possible for them to go back to
school, while on the job, to complete a 4 year degree in
microfinance.
Put together by PinoyME partners, this certificate course for loan
officers is scheduled for a 2010 pilot run in 5 universities in the
country. The curriculum is also awaiting formal TESDA approval,
Photo: Capacity Building Workshop
5
The course aims to train people to become MFI front-liners in
the field: the hardy “account officers” who will fan out into poor
communities to collect weekly payments, and to search for new
beneficiaries. “If the MFIs are to expand their reach more of the
poor, you need people on the ground, and that means the loan
officers,” says Prof. Chua. Training these personnel will be a big
service, he says. “This intervention is particularly relevant for
the smaller MFIs (they constitute the majority) which usually do
not have the resources for in-house training units.”
PinoyME CAPACITY BUILDING: Providing a Pool of MF Human Resources
Because the course uses the “dual training, competency based” approach, it prepares
students for the actual rigors of being loan officers. Chua explains: “You don’t focus too
much on the theory but you start with the particular competency needed to do a
particular job and you work backwards. And to draw that out, you talk and you consult
the actual workers and the supervisors. Then it’s not just classroom work, but on-thejob, it’s seriously monitored field level work.”
Although training loan officers is the first priority, it is only part of a larger “ladderized”
curriculum. In the works is the second level, one- year diploma course for MF leader/
supervisor, and a third level one- year bachelor of science degree course for MF branch
manager. Also in the works is an “equivalency” program, where current loan officers can
earn academic credits for work experience.
Why lodge such a training in schools? Why not simply offer a special service? "Formal
institutions are important for students, for parents and the MFI's as these provide quality
standards, and professionalism," Chua says. "Because of the nature of the school as an
institution, there are also higher chances of sustainability."
“If the MFIs are to expand
their reach more of the
poor, you need people on
the ground“
PROF. RONALD CHUA, Convenor
Capacity Building Working Group
When these courses are finally in place, and as more schools begin to offer these courses,
MFIs will hopefully see a steady stream of MF professionals, ready to use their
knowledge and skills for the poor.
Partners Making It Possible
This pioneering course for loan officers is the painstaking
work of several partners: the Hans Seidel Foundation, the
Ninoy and Cory Aquino Foundation, the national and
regional MFI councils and networks, participating
universities, various experts in training design, and the
PinoyME facilitators.
Prof. Ronald Chua recalls: “We had to go through a long
process of consultation and exploration to find out what the
MFI needs and priorities were, and also to find out who was
doing what… Alternatives were explored… There was a lot of
cross-learning… ”
When the need for loan officer training was identified,
putting together the course was another joint effort. Chua
continues: “The Ninoy and Cory Aquino Foundation brought
in the Hans Seidel Foundation, which funded our efforts.”
6
PinoyME CAPACITY BUILDING: Providing a Pool of MF Human Resources
PinoyME facilitated the curriculum development. Mr. Antonio Alegria of Dual Training System Network Foundation or DTSNEFI, an
expert on the dual training competency based approach was brought in to design the course.
In the pilot areas, there is a collaboration between PinoyME, the pilot schools and the local MFI councils or networks.
“The academe like Bicol University provides the direction of the curriculum per CHED and university standards,” notes Dr. Fay Lauraya,
President of Bicol University. Chua continues: “The schools of course want a market for their graduates, so you need to work with the
industry, with the MFI networks… You also need collaboration of the trainors. When the faculty teaches, they probably will not have the
hands-on experience. You need a team approach between faculty of the schools and the senior trainers or managers of the MFIs.”
It has been a good two years of untiring collaboration. Chua reflects: “For more meaningful initiatives to take place, the key is that there
is no single dominant player. You can’t have one entity to do it, you need several entities to work together… You need to bring them
together to collaborate, and that is the key strength of PinoyME”.
Dr. FAY LAURAYA, President
Bicol University
Pioneer
From the start, the Bicol University in Daraga, Albay was very interested in pioneering the MF
course. “The Bicol Region is one of the poorest regions in the Philippines and we believe in
microfinance as a way to alleviate poverty,” says Dr. Fay Lauraya, President of the University.
“However, micro finance institutions in Bicol find it hard to hire competent personnel … The
more MFIs thrive, the need for MF officers increases, and yet there is no school that trains
students for these specific jobs. Thus, Bicol University wanted to pioneer this effort.”
Working with the PinoyME consortium enabled them to do this--with much less trouble and
at much less cost than if they had tried to do it on their own.
7
Photo: Bicol Univeristy students taking the MFI course
“The University was spared the nitty gritty and the expense of formulating the MF
curriculum. The consortium partners provided the rationale and directions regarding
the competencies required, and also looked into where students would go after
graduating from the program. (Eventually, when the course takes off full-blast,
graduates may qualify for many MF positions: micro finance officers, account agents,
branch managers, sales representatives, project leaders, researchers). The partners also
brought in their wide networks and linkages in the Bicol Region and abroad, and this
got students interested in taking the course.”
Enthusiasm is high. Dr. Lauraya recalls: “The launching of the Micro Finance
curriculum (BSBA major in Micro Finance) in the Bicol University College of Business,
Economics and Management was a very big success. With the help of our partners,
the PinoyME, the Bicol Consortium for Development Initiatives, and the Bicol Micro
Finance Institutions sent students to enroll in the program as scholars after passing
the University admission tests. We are very optimistic, that based on the support we
receive, this course offering will be sustained.”
With the course, MFIs are
guaranteed a rich pool of
human resources… Human
resources is always one of the
challenges for a growing MFI.“
The Bicol University is not alone. Four more universities are preparing to offer the
course in 2010: the Araullo University, College of the Immaculate Conception,
Brokenshire University, and the University of Makati.
Rich Pool of Human Resources
Fr. Jovic Lobrigo, who chairs the Bicol Micro Finance Councils, says that the
ladderized MF course is a welcome development. “The MF curriculum in Bicol
University has become very popular particularly among the MF clients (the Nanays! Or
mothers specially) who want to see their children working and being a part of the MFI
or the industry that they’ve come to respect and be loyal to. The BMCI regards this as
a value addition to the sector. Also, it creates a multiplier effect as more people (even
those in the academe) learn about microfinance.”
He elaborates:
“With the course, MFIs are guaranteed a rich pool of human resources… Human
resources is always one of the challenges for a growing MFI. An MFI typically needs
to train one loan officer for one month (this includes on-site exposure), then spends
another 2 months to give the applicant hands-on experience as a “tag along,” and only
gives him the go-signal after 6 more months of a probationary period. With the
microfinance course, the learning process is shortened, hence, the MFI becomes more
efficient as the applicant comes to the MFI armed with both theories and practical
experience in microfinance. What could be better than this?”
FR. JOVIC LOBRIGO, Chair
Bicol Microfinance Council
8
The Difference That Credit Makes
Cold Comfort
For Sally and Gilbert Rambo, ice cream is what puts food on the table and sends their
children to school. The Rambo family from Kalinangan, Bukidnon began their ice cream
business in 2004, buying all of their equipment in Valencia City with the help of a
cooperative. In 2009, they availed of a Php 10,000 loan (from Hagdan sa Pag-Uswag
Foundation, Inc-PinoyME Foundation) to augment their capital for an enterprise that
continues to thrive.
Gilbert Rambo shares that selling ice cream in the schools of Kalinangan districts makes
for brisk business. He also plies their cold products during fiestas, and accepts orders for
special occasions. He estimates their gross weekly sales at Php 7,000, and from this, they
manage a net income of Php 3,500.
For the Rambos, ice cream is bread and butter—and credit the insulation that keeps this
treasured income source from melting away.
Going the Distance
Nena Labaniego from Wao, Lanao del Sur is a tireless vendor. She does not simply settle for
one place, but makes an unflagging round of markets in Wao, Lanao del Sur, Banisilan,
Cotabato, and Kalinangan, Bukidnon--selling vegetables, spices, canned goods and other
basic household goods. She is accustomed to the work, having been immersed in this kind
of livelihood since 1973. Staying in this business is important to her, since it enables her to
send her youngest daughter to high school, and to augment her husband’s income from
farming. She earns about Php 3,000 a week, from gross weekly sales of Php 7,000. In
October 2009, she took out a loan of Php 7,000 (from HSPFI-PinoyME), her second already.
Loans like these enable her to continue to make the round of markets, in order to make
ends meet.
9
Windows
Liza Enola from Camiguin Island lives on the edge. With 8 children (the youngest a
new-born) and a carpenter-husband who gets only seasonal work, every day is a challenge to
keep food on the table and destitution at bay.
Enola was desperate to find a way to supplement her family’s meager income. Then, in 2008,
she became a client of Hagdan sa Pag-uswag Foundation,Inc. (HSPFI). With the help of the
credit lifeline provided by HSFPI-PinoyME, she was able to slowly build up a sari-sari store
business and little ready-to-wear (RTW) venture. Now on her 4th loan cycle, she used her
latest availment of Php 13,000 to augment her capital for these two small enterprises. She now
gets weekly sales of Php 3,550, from which she usually earns a net income of Php 1,420. This
has opened a window, giving a little hope to a family that once had only dark days to stare into.
Working overtime
Fifty-three year old Virginia Aquino is from Brgy. Makapilapil, San Il defonso,
Bulacan. As a mother of eight children, she works double-time. Her main
source of income is a sari-sari store, where she also sells “lutong ulam’ or
cooked food. Her sari-sari store has daily sales of Php 600, from which she
earns a net income of Php150-200 a day. For the last 10 years, she has also
run a hog breeding business. Her lone sow is bred, the piglets are fattened and
then sold after about 5 months for approximately Php 8,000 each. For Aquino,
credit is critical to keeping these diverse income-generating enterprises afloat.
In 2009, she availed of a loan of Php 30,000 (through ASKI-PinoyME). She
has been member of Alalay sa Kaunlaran, Inc. (ASKI) for the past 7 years,
remaining reliable through many loan cycles.
10
KNOWLEDGE MANAGEMENT
Using Information to Empower
PinoyME Knowledge Management Working Group (KMWG) draws its partners from diverse fields in the research, academic and
information and communications technology (ICT) communities. It works along two vital tracks: strategic research in aid of policy
advocacy and upscaling microenterprise development, and improving the effectiveness and efficiency of MIS (Management Information
Systems) MFIs. It is headed by Dr. Cayetano Paderanga, former Director-General of the National Economic and Development
Authority (NEDA), former member of the Monetary Board, and former President of CIBI, one of the biggest credit information bureaus
in the country.
Streams
There is a particularly valuable service that PinoyME can offer the
microfinance industry, according to Dr. Gilbert Llanto, Senior
Fellow at the Philippine Institute for Development Studies (PIDS)
and former Deputy Director-General of NEDA. As a prolific
researcher in the field of finance, Dr. Llanto is recognized as one
of the gurus of microfinance in the country.
“For the microfinance sector to grow, it has to receive a constant
stream of new ideas,” says Dr. Llanto. “Innovations, for example,
new perspectives, new and perhaps better approaches to
dealing with clients, etc. Providing these ideas is a distinct role that
PinoyME can play, in the sense that it is a focused organization with
excellent contacts in the research and academic community.”
Many of these contacts are now collaborating on a strategic
research initiative convened by Dr. Llanto himself.
MFI-Pedia
One of PinoyME’s knowledge management initiatives is the
collection of a compendium of studies covering the “length and
breadth” of microfinance and microenterprise development in the
Philippines. “We are putting together all the knowledge available
on microfinance,” says Dr. Cayetano Paderanga. To date, some
300 studies on microenterprise development in the
Philippines have been assembled and uploaded in the
Socio-Economic Research Portal of the PIDS to make them
available to the public. This collection will constitute a virtual
“MFI-Pedia,” a ready resource for anyone who wishes to study the
industry, its reach and impact, as well as trends and issues.
This central stream of information
can feed the development of
responsive industry innovations,
and indicate more areas for rigorous
inquiry. “This can really lead to
several directions,” reflects
Dr. Paderanga.
11
PinoyME KNOWLEDGE MANAGEMENT: Using Information to Empower
A Microfinance Policy Agenda
This exhaustive research will feed into a microfinance policy agenda that can serve as the
microenterprise development community’s advocacy platform in the coming years. “You can do
certain things on the ground, but quite a number of the microfinance issues are really at the level
of macro policy,” says Prof. Ronald Chua. “That is why you have to work on two levels: on the
ground and at the top.” It is this facilitative role of getting the experience of people on the ground
and feeding them towards policy makers and vice-versa, that PinoyME hopes will create a more
dynamic industry that can carve a strategic space in the country’s anti-poverty and economic
development sphere. A stakeholders’ conference will be convened by PinoyME to build a broad
constituency behind this agenda. The policy agenda will be presented to candidates in the 2010
elections to put microenterprise development into their consciousness.
Streamlining MIS through ICT
MIS (Management Information Systems) is the backbone of an MFI’s
operations. When records are in disarray, an MFI cannot retain its
clients, assess its profitability and effectiveness, nor expand its client
base.
For growing MFIs, MIS can be especially challenging. As the number
of clients climb into the tens of thousands, the mountain of
information becomes increasingly difficult to manage, and finding a
workable solution can develop into yet another nightmare.
To make MIS more efficient, many MFIs have turned to information
and communications technology (ICT). By and large, however, the
effective use of ICT has proved to be quite a challenge. Apart from
the lack of IT expertise among MFIs, the ICT community does not
yet see microfinance as a viable market such that the price of
products and services are not affordable to MFIs.
“This (central stream of information)
can really lead to several
directions“
Dr. Cayetano Paderanga, Convenor
Knowledge Management Working Group
12
PinoyME KNOWLEDGE MANAGEMENT: Using Information to Empower
Initiatives
An Automation Guide
MIS4MFIs Web Portal
Having understood the obstacles to
improving MIS of MFIs through a series
of nationwide consultations, the
Knowledge Management Working Group
set out on a number of initiatives to
address the long festering problems that
prevent MFIs in their bid to reach more of
the country’s poor.
First, it created the “Guide to Automation
for Philippine MFIs ”, a toolkit that helps
MFIs understand the rudiments of
computerization of their MIS, the issues
that they should expect to confront and the
options available to them in selecting the
appropriate technology based on their needs
and resources.
Next, the KMWG established an MIS
networking portal called MIS4MFIs
(http://mis4mfis.ning.com). MIS4MFIs
aims to provide a facility for microfinanceMIS practitioners to post their questions or
concerns and to share their experiences in
automatioin. IT experts and service
providers are also brought into the group
to give advice to MFIs and to share the
latest technology trends. This site will
complement the Automation Guide by
providing a venue for interaction and
nurturing a supportive community
between and among microfinance
practitioners and service providers.
The Automation Guide is now a technical
resource document endorsed by the
Consultative Group Against Poverty (CGAP),
the international partnership of donors,
MFIs and multilateral institutions to scale up
microfinance globally. It can be downloaded
at the Microfinance Gateway (www.microfi
nancegateway.com) or at PinoyME’s
MIS4MFIs portal.
Web-based Service
through MiFITS
The next step was to organize MiFITS.
“The Microfinance Information Technology
Services (MiFITS) is a vehicle for trying
to break through the IT logjam,” says
Dr. Cayetano Paderanga. “It comes from the
belief that IT-- well done--can increase the
efficiency and the reach of the MFIs.”
Organized by the Institute for Development
and Econometric Analysis, Inc. (IDEA)
with the support of PinoyME, MiFITS offers
a range of consulting and technology
application services to assist MFIs in the
process of automating their MIS. Its main
product is software as a service, a MIS
software on a central server that can be
accessed from any workstation connected
to the internet. MFIs that opt to invest
in this service stand to save on expenses
related to servers, software licensing fees,
networking and hosting fees, maintenance
and systems administration.
13
An Automation
Course for MFIs
Bandwidth
The working group’s most recent project
puts together all its previous initiatives.
It designed an automation course that
consists of a training program followed
by a one-on-one consulting service.
The first of its kind in the country, the
course is targeted for small and medium
sized MFIs which have limited resources,
cannot afford an in-house IT team, but
need effective ICT systems to scale up
their operations. IT service providers
and vendors will also be invited to
participate in the program.
As MFIs try to help client microentrepreneurs
link up to the formal economy, they pursue
an increasingly wide range of partnerships—
especially with vital players in the corporate
community. With more and more companies
seeking to “do business at the base of the
pyramid,” a new partnership “bandwidth” is
becoming possible.
The first part of the course is a classroombased inter-active workshop where experts
will provide technical inputs to MFI heads
and MIS managers and engage them in
discussion on the challenges of automation.
The automation guide serves as the
“textbook” of the workshop. In the second
part, the working group members will
manage a consulting process where
consultants and vendors will be paired with
MFIs in the implementation of a technology
plan that they developed during training.
MiFITS will be one of the consulting outfits
that will provide its services in this phase.
The MIS4MFIs will serve as the
information networking platform where
MFIs, experts, technology vendors and
service providers can exchange notes in the
course of implementing technology
solutions that were conceived during
training.
SMART’s Business Development Unit was
designing strategies to widen the reach of
SMART Money, one of its mobile
technology products. Smart Money is a
re-loadable payment card that can be accessed
through a Smart mobile phone—a technology
designed to help subscribers pay bills, transfer
money, make purchases and generally
manage their money with the use of their
cellular phones. PinoyME linked SMART to
some of the largest MFIs in the country with
social and client networks reaching into
remote rural areas in the country.
Although the course will only be piloted
in the first quarter of 2010 in Mindanao, a
number of donors have already committed
resources to support the program. As such,
the program already has the wherewithal to
be rolled out even before it is piloted.
Maybelle Santos, head of SMART’s Business
Development Unit, is grateful for the link to
the MFIs. Through PinoyME, she says, the
One of the most innovative partnerships that
developed in 2009 was a tie up between MFIs
and Smart Communications, a giant
telecommunications company in the country.
The collaboration resulted in the successful
pilot run of a technology that enabled SMART
to extend the reach of SMART Money from
the poblacion or town center pawnshops to
the remotest villages where they have a mobile
phone signal. This technology is now ready for
roll-out to the market at large.
company was able to get “leads as to
who the microfinance players and
stakeholders are in the country. It also
provided us with information on the total
business context: what microfinance
assistance is being used for and its
impact on lives and on communities
where they operate.” She said the
company was also able to get
“validation for the use of various
products and services, and opportunities
for collaborating with other stakeholders
to leverage strengths and access
channels.”
With the social infrastructure that MFIs
provide, Santos can see the potential of
continuing the partnership in the future.
She says that working with the PinoyME
network can benefit the company in
terms of “policy formulation and
implementation, translating strategies
into workable products/services, and
creating programs and models that can
move products from pilot to operational
scale.”
There are indeed rich possibilities in
designing communications technology
services in a way that serves the needs
of telecom companies and the
micro-enterpreneurial poor. A new
bandwidth altogether.
14
The Difference That Credit Makes
Credit Maidens & Mavericks
Erlinda Catada is on her maiden credit voyage with an MFI. Based in Sitio
Lawis, Barangay Buluangan, San Carlos City in Negros Occidental, Catada
has been into fish vending since 1981. But she had never borrowed through
an MFI before. She heard about Pag-Inupdanay Inc. (PI) through her kumare
and was intrigued by the opportunity to access a loan at surprisingly low
interest. She decided to give it a try and is now on her first loan cycle, having
borrowed Php 2,000 (PI-PinoyME Foundation) to purchase an additional
fishing net for their fishing boat. If all goes well, she will likely go in for a
longer haul, drawn in by more accessible credit. (nice photos here of her with
fishing net and fishing boat: pang visual variety)
ve vinegar
ti
Preparing na
Nanay Agripina with her piglets
In contrast, Agripina Amayna (from Purok Bolinao, Barangay Zone 6, Cadiz
City, Negros Occidental) is on her 4th loan cycle, and a growing expert in the
art of making credit go a long way. Her latest loan of Php 10,000 (from
PI-PinoyME) was used to finance a new kapehan (coffee stall). She also used
part of the loan to purchase piglets for fattening.
But those are only her latest ventures. She is also engaged in vinegar
production, buying and selling charcoal and tuba (native coconut juice). She
also reveals that because of her continuous loan accessing from Pag-Inupday
Inc. (PI), she was also able to buy a tricycle (which her husband—seemingly
as tireless as she--operates on weeknights and week-ends, when he’s not at his
day job as a boat builder). She also bought a motorcycle, and put up a
hog-raising venture.
From all her little businesses, Amayna earns a minimum net income of
Php 3,000 a week. An emerging micro-enterprise maverick, she is out to do
all she possibly can with the credit line that is given her.
15
Nanay Erlinda with her fishing nets
Planting Her Own Garden
Evalinda Linsag lives near the coastal area of Manay in Davao Oriental. Her family relies
on the daily wage of her husband who works for a copra trader, as well as the income
from a ¾ hectare farm planted to corn and other crops. However, with daily family
needs to support and children to send to elementary school, the family needs other
sources of income. Linsag availed of a Php 5,000 from AJDFI-PinoyME to finance her
own vegetable farm, which she planted with eggplant, pepper, and beans. She became a
vegetable vendor, and added to this the buying and selling of bananas in Manay Market.
She estimates her combined weekly sales at Php 1,160, from which she derives a net
income of about Php 400. With her enterprising spirit, and the opportunities that
micro-credit gives her, Linsag is able to help provide for her young family.
Keeping an enterprise revved up
Mrs. Jessica Rivas is a 38-year-old mother of three from Brgy. San Agustin, San Miguel, Bulacan. She and
her husband run a motorcycle “buy-and-sell” business. They buy second-hand or repossessed motorcycles,
recondition them, and sell them on special terms, mostly to those who want to go into tricycle driving.
These drivers then pay them back through a “hulog-boundary” scheme, with terms ranging from 6 months
to 2 years. Since starting this business 2 years ago, they now have 40 “active accounts.” Rivas’ husband
is also a mechanic who repaints and reconditions different motorcycle models. The couple can earn as much as Php 20,000 per month during the peak
months of January to June.
With a recent loan of Php 50,000 (through Alalay sa Kaunlaran Inc. or ASKI
and PinoyME Foundation), the couple was able to buy 2 repossessed motorcycles for their business.
The couple is very grateful for the help of the microfinance institution ASKI,
of which they have been members of good standing. Mrs. Rivas says that
financial assistance is crucial to helping them maintain a supply of motorcycle
units, without which their enterprise would not thrive. Because the demand
for their products is increasing (mostly from drivers who want to operate
tricycles), financial assistance is becoming even more necessary.
16
Business Development Services
A Forum for New Threads of Talk
Credit alone won’t cut it. Poor money sense, poor planning and management skills, the inability to develop and package a product, the
inability to produce in bulk, lack of access to markets: any one of these (and more) can sink a micro-entrepreneur’s start-up venture or
stop it from growing into a stable, thriving business.
That is probably why, despite increasing access to microcredit, only an alarming 1-2% of microfinance clients actually graduate into small
and medium enterprises—the kind of enterprises that can help families eventually break out of poverty.
MFIs know this. For many years now, they have been trying to provide their clients not simply access to credit, but access to a variety of
business development services (BDS).
Provoking Conversation
A Network and Forum on the Net
PinoyME has helped encourage BDS conversations within the
microfinance industry, as well as with existing and potential
partners. It organized first-of-a-kind conferences (in
partnership with donor agencies like the Peace and Equity
Foundation and Fundacio CODESPA) to promote an exchange of
BDS
experiences and information, cross learning, and collaboration.
These fora brought in MFIs, NGOs, the academe, donors, and quite
significantly, business organizations and networks. Discussion
pursued many new threads.
A very important result of these conferences is the forging of a
network of BDS providers. By organizing the network, PinoyME
has helped create a permanent forum for learning, exchange and
collaboration on BDS.
In 2008, a conference brought together 50 organizations to map
BDS providers and identify best practices. A second conference
was organized in 2009, and this was attended by 100 multi-sectoral
participants from all over the country. The conference increased
awareness about best BDS practices, forged an informal network of
BDS providers, and identified areas for working together.
In 2009, PinoyME began a vital “conversation thread” with the
business community. It co-sponsored with the League of Corporate
Foundations a conference on “doing business at the base of the
pyramid.” This conference brought attention to successful models
and propagated corporate social responsibility via business
relationships with poor communities.
17
PinoyME has also set up a free networking site BDS4MEs (http://
bds4mes.ning.com) for information sharing on BDS. Conference
proceedings and new data can be uploaded on it, and
stakeholders from all over the country can interact online.
Thus a BDS learning community is in growing, online and offline.
With actual and virtual fora in place, talk is expected to be good.
PinoyME business development services: A Forum for New Threads of Talk
Strings Attached:
Market Access through ECHOstore
How to bring the products of micro-entrepreneurs into the mainstream market is a big BDS challenge for MFIs.
An emerging tie-up with ECHOstore, however, promises to yield some answers.
ECHOstore (Environment, Community and Hope Store) is a chain of concept stores like no other in the Philippines.
Envisioned as a “one stop shop” for sustainable living, it provides a range of alternative products that promote health,
fair trade and care for the environment.
While ECHOstores is a “for profit” venture, it is also a social enterprise. It works with
various partners to give market access to the products of small marginalized, cultural
communities, creative industry practitioners, women’s groups and foundations. It also
offers mentoring for business development, product development and packaging.
Mutual Gains
In a conference organized by PinoyME, MFIs were able to touch base with this
pioneer chain store.
ECHOStore President Pacita Juan says: “PinoyME connected us with a huge network
of MFIs that had beneficiaries needing our services, particularly market access.
Partnering with PinoyME gave us more contacts with people who could be our
potential suppliers/partners. We also found people and organizations who needed
our ‘ECHOteach’ service for business development and ‘ECHOdesignlab’ for
product and packaging mentoring.”
For the giant MFI CARD, market possibilities for client micro-enterprises
have definitely opened up. CARD’s president Aris Alip says proudly,
“ECHOStore is now displaying products from CARD clients.” That goods
made by CARD micro-entrepreneurs now sit on the shelves of stores located
in high-end commercial centers is already a breakthrough in itself.
“(For the 2009 conference) we were able to
gather all key players in microfinance”
ARIS ALIP, President
Center for Agriculture and Rural Development (CARD)
18
PinoyME business development services: A Forum for New Threads of Talk
Potential
This is the kind of market link up that particularly suits the micro-enterprises that
PinoyME hopes to help. “There is tremendous potential in the partnership,” says Vistan.
ECHOstore is likewise interested. Juan volunteers: “The forward-looking attitude of
the PinoyME management inspired us to broach an idea for a PInoyME-ECHOstore
partnership which is now on the drawing board. Leveraging each other’s strengths and
networks, we are in the process of doing a pilot for a PinoyME store by -ECHOstore --a Pinoy Pop ‘Pasalubong’ Store. The design, product development and specialty concept
and management is by ECHO, and the supply chain would be the PinoyME MFI microentrepreneur network of beneficiaries.”
If this joint venture succeeds, it stands to be a BDS model in the area of providing market
access service to micro-entrepreneurs. It stands to be a significant step toward making
Philippine micro-enterprise commercially viable.
Profitable encounters
MFIs appreciate PinoyME’s attempts at designing profitable encounters between MFIs,
their clients and potential partners in mainstream business.
For Aris Alip, President of CARD, and BDS working group head, the 2009 conference
was particularly fruitful. “We were able to gather all key players in microfinance,” he
says. “We engaged entrepreneurs like BINALOT, ECHOstore, Hapinoy/Microventures
and other companies.”
“PinoyME connected us with a huge network
of MFIs that had beneficiaries needing our services“
PACITA JUAN, President
ECHOstore (Environment, Community and Hope Store)
19
What can be seen is that MFIs and their clients are beginning to talk about markets. Moreover, we are
getting some small supply contracts for clients of MFIs. BINALOT, for instance, is now beginning to
buy rice from CARD clients. ECHOstore is also now
displaying products from CARD clients. In other words, the engagement brought
concrete outputs for the MFIs in terms of market outlets, product promotion, and
other things.”
Fr. Jovic Lobrigo, head of the Bicol Microfinance Council, appreciates the wealth of BDS connections
that PinoyME brings to the doorsteps of MFI and MEs. “So many things have helped us: PinoyME’s
initiative to mainstream the MEs through its Business to Business Portal, its link with the private
sector, its marketing channels.”
In the coming years, PinoyME hopes to open up many more opportunities for MFIs and their clients.
Passion and Business Savvy
For Fundacion CODESPA, a Spanish NGO operating in the Philippines, BDS for
micro-enterprise is a critical area that deserves full stakeholder support.
“We are also working along the lines of microfinance,” explains Esther Santos, Philippine Delegate
of CODESPA. “But we are now gearing our support to BDS, particularly to the all important area of
providing access to markets—which we feel is the more sustainable intervention that can be made for
the poor. That is why we choose to support PinoyME: because we see that the consortium’s efforts
dovetail with our own priorities.”
Santos is struck by what she calls a “new business thinking” that permeates the PinoyME consortium.
“PinoyME is actively guided by a group of advisers who are highly regarded leaders in
business. They bring in a wealth of entrepreneurial expertise and perspective into the
organization. Moreover, the MFIs and MEs within the consortium itself seem to be
moving into this new business thinking: that is why concern and efforts in BDS/market linkaging is
becoming more pronounced... When you are doing business, it’s not enough to have the passion for
it. You must also have the skills, the business savvy. I am happy that the MFI-ME community is
thinking more and more in this way.
Photo: CARD Products (From top:
shell necklace, shell necklace close up,
garden stake butterflies, and butterfly
candle holder)
20
The Difference That Credit Makes
Looking to Diversify
Three micro-credit beneficiaries know a good opportunity when they see one, and
seize upon it to diversify.
Ernesto Tolentino from Pantukan in Compostela Valley started his cut flower venture
sometime in 1982. He began to access financial assistance from AJDFI in 2003, and
was eventually chosen as center coordinator. Tolentino is now on his 8th loan cycle,
having availed of credit worth Php 20,000 from AJDFI-PinoyME to augment his capital
for his flower production. He estimates weekly sales of Php 10,000, from which he
derives an income of Php 3,000. But he has wisely chosen to invest his income into
assets for other ventures, and has—over time-- purchased farm equipment, livestock,
and a sewing machine, among others.
Elbino Labatida of Barangay Magnaga, Pantukan, Compostela Valley first accessed a
loan from AJDFI in 2004. He recently borrowed Php 30,000,
and is now on his 8th loan cycle funded by AJDFI-PinoyME.
He uses his loan proceeds to augment his capital for charcoal
making and operating a sari-sari store. He estimates weekly
sales of about Php 7,600, netting him an income of about
Php 2,350. He says he will not confine himself to one or
two ventures only, and if given the financial resources, will
grab any business opportunity to bring additional income
to his family.
Cynthia dela Cruz is an emerging Jill-of-all-trades. An AJDFI center
coordinator at Brgy. Ogpao, Sta Maria, Davao del Sur, she engages in
livestock raising, fishing, and charcoal production. She is on her 6th
loan (Php 10,000 from AJDFI-PinoyME), and enjoys weekly sales of
Php 18,263, and a net weekly income of Php 10,416. From the income
of these micro businesses, her family was able to buy additional
livestock and equipment for fishing. She also says that because
micro-insurance is built into the lending scheme, her family is assured
of a fall-back in case of medical emergencies. She looks forward to the
day when her family will finally emerge from poverty.
Credit helps this entrepreneurial spirit thrive, and for Tolentino,
Labatida and De la Cruz, diversification will be the driver towards
a better life.
21
Wings through micro-credit plus
Grace Ramoga from Barangay Bonifacio, Magsaysay, Misamis Oriental and Rogelio Jugarap
of Barangay Alagatan, Gingoog City are lucky people. Unlike many micro-entrepreneurs
who raise poultry for a living, they aren’t flying solo. They have a licenced supplier of
chicks, feeds, and poultry medicine. They also have veterinary help from “para-vets” or
farmer-technicians. Most importantly, they have a guaranteed market for their produce.
Ramoga and Jugarap are broiler contract growers under the credit wing of Katilingbanong
Pamahandisa Mindanaw Foundation Inc. (KPMFI). KPMFI has clinched a supply
contract with a popular chain of stores selling “lechon manok” (roasted chicken) and are
able to help selected clients under this almost risk-free scheme. Ramoga and Jugarap are
lucky indeed.
But luck isn’t everything.
Ramoga was spotted by the KPMFI as one who could sustain and expand a broiler
production business, and thus became part of KPMFI’s client-group of broiler contract
growers. Ramoga did not disappoint. From an initial 200 heads in 2007, she was able to
expand her business rapidly, and in November 2009, welcomed a delivery of 2,600 chicks.
Ramoga’s most recent loan of Php 25,000 (from KPMFI-PinoyME Foundation) in August
2009, (payable in 15 months) was used to expand her poultry house. Her latest harvest in
October 2009 gave her an impressive net income of Php 9,120.
Jugarap was also chosen by KPMFI under its scheme of broiler contract growing. Like
Ramoga, he also proved his mettle as a broiler grower, and in 2009, availed of a loan of
Php 25,000 (from KPMFI-PinoyME Foundation) to expand his poultry house. He is able to
harvest broilers 4 times a year, and now earns a net income of Php 20,000 per harvest. He
says his income from broiler production helps a lot in sustaining the daily household needs
of his family.
But chickens go a long way at the Jugarap household. Even chicken dung doesn’t go
to waste. Jugarap uses it as organic fertilizer in a small farm planted to corn and other
crops—yet another way to augment family income.
For the enterprising likes of Ramoga and Jugarap, micro-credit plus a little extra help are
wings to fly with.
22
RESOURCE MOBILIZATION
The PinoyME Foundation
The PinoyME foundation was formed to provide investment
banking support to MFIs, so that they would have access to
the funds they need to fuel growth. The resource
mobilization working group of PinoyME was dissolved to
give way to the foundation which was formally registered
with the Securities and Exchange Commission in July 2007.
The board of trustees of the foundation is a “dream team”
of industry captains, business leaders, expert bankers, and
heads of corporate foundations. It is chaired by
Mr. Deogracias Vistan, former President of the
Landbank of the Philippines.
The PinoyME Foundation offers the following services:
1. A credit program for MFIs, made possible through a credit line from the Small and Medium Enterprise
Credit (SMEC) of the Philippine Business for Social
Progress (PBSP).
2. A Social Investment Fund, which is used to lend to
viable, rural ME’s through MFI’s. The Foundation
encourages the public to contribute to this fund.
3. Financial Consulting Services. Using the expertise of its
board members and expert volunteer financial advisers,
the Foundation helps MFI’s access funds from the
capital market and develop financial products to diversify
their funding sources and make them more financially
viable in the long-run.
23
An Ally at the Frontier
Credit delivery is the lifeblood of microfinance. Without it, MFIs
cannot sustain the journey of thousands of micro-entrepreneurs
toward a better life. And if MFIs are to grow, if they are to reach
more of the poorand help them grow their life-sustaining
enterprises over time, capital becomes even more critical.
Many MFIs continue to rely on grants from multilateral donor
agencies. Some are able to secure commercial loans or employ
other financial instruments. “We are seeing some very good
signs that the banking industry is recognizing the commercial
viability—and also the social desirability—of lending to the
microfinance sector,” says Deogracias Vistan. “Unfortunately,
there aren’t as many lenders to the microfinance industry as there
should be.” To complicate matters, the funds coming into the
industry are going to a few MFIs that are already strong and well
established. Meanwhile, a large number of emerging MFIs are
struggling to access funds to enable them to reach more poor
clients.
There is also growing interest in Philippine microfinance among
international social and commercial investors. Unfortunately,
there are few institutions that have the industry knowledge and
the strategic links to explore the possibility of unlocking these
potential resources.
PinoyME RESOURCE MOBILIZATION: The PinoyME Foundation
A Banker and Broker for Microfinance
The PinoyME Foundation saw its emerging niche in these gaps
and opportunities.
Vistan explains: “We thought that if we tried to tap sources of
funds, we could be an institution that can lend funds to
microfinance institutions, which they can on-lend to their
micro-entrepreneurs. We would be a financial institution like a
bank.” At the same time, the group saw the need to provide
capacity building services that would enable MFIs to access
commercial funds.
These innovative ideas took hold. PinoyME Foundation (PMEF)
was formed to break ground in a new frontier: becoming what
Vistan calls a “social investment banker” for microfinance. PMEF
would be a broker between the financial needs of the microfinance
sector and the supply of resources and services in the market.
tapped into a credit line offered by the Small and Medium
Enterprise Credit (SMEC) being administered by the Philippine
Business for Social Progress (PBSP). With this, PinoyME
Foundation was able to open a new and sizeable credit program for
MFIs. To date, the total loan portfolio of this program has reached
P85 million--with 7 large and medium-sized MFIs in different parts
of the country as clients. This credit program has enabled PMEF to
establish a credit delivery system, which will be the backbone of its
financial intermediation services.
“We are still an institution of modest means,” says Vistan. “But
we are working to increase our capital base through various
strategies.” With a good track record in deploying funds towards
the most needy sectors, PMEF hopes to access more resources that
can be channeled to underserved areas and MFIs in the future.
Already international investors interested to enter the microfinance
market in the Philippines are coming to PMEF to be oriented
about potentials for investments the local market.
But at the same time, PMEF would be a social enterprise. “This
means PinoyME Foundation must be a good financial intermediary
as well as a viable financial institution itself,” says Vistan. “We will
strive to create value while promoting equity.”
A Credit Delivery Service
PMEF’s founder and chair emeritus, former President Cory Aquino,
led the capital campaign for the foundation. The Foundation then
“We hope to eventually grow into the kind of entity that
can be a total ally for microfinance… help connect
micro-entrepreneurs and microfinance institutions
to the sources of wherewithal that will help them
become truly viable.”
DEOGRACIAS VISTAN, Chair
PinoyME Foundation
24
PinoyME RESOURCE MOBILIZATION: The PinoyME Foundation
A Campaign for Public Investments
One of PMEF’s resource mobilization strategies is a public
fundraising campaign—a campaign that invites the public to
contribute to a social investment fund (SIF).
“We wanted to create a new kind of investment scheme – a social
investment scheme,” explains Vistan. “We wanted to offer to the
public an opportunity to ‘invest’ in micro-enterprise by
contributing to a social fund that will, in turn, be lent out--through
MFIs--to the micro enterprises that need it most. The returns to
the investor are of course not monetary. But what we offer is the
satisfaction of being ‘shareholders’ in this adventure of
economically empowering the poor.”
Unlike traditional donations where donated funds are spent
outright, the donations to the SIF are perpetually revolved, to the
extent that PMEF can collect on loans. Thus the donor, or the
social investor, becomes a perpetual “shareholder” in the fund.
What would be the special value of such a Fund? Because of the
relative lack of restrictions, PMEF would be able to use it in many
ways to open new tracks of financing. PMEF would also be able
to invest in potentially high-impact but higher-risk areas that
traditional microfinance does not yet adequately serve. Remote
agricultural communities, for instance, where poverty incidence is
highest, and where trategies need to be creatively re-invented to
make lending truly viable. Or innovative but sustainable projects
that will benefit underserved communities. Or effective enterprise
models that can be scaled up.
In other words, such a fund would help PMEF do strategic
investment banking—the kind of banking that will help MFIs attain
greater reach and impact through access to capital. By investing in
unchartered areas, PMEF hopes to create new markets that will
attract investments in the future.
With this vision in mind, PMEF launched its public fundraising
campaign. With a website, a donation portal, an online menu of
donation or investment options, a dedicated phone line, special
bank accounts, and an initial thirty investment ready MFIs and
MEs, PMEF launched the first leg of a tri-media campaign to raise
“investment donations.”
Several ads ran in the major dailies, featuring the stories of
micro-entrepreneurs who, with the help of small loans, were able to
turn their struggling lives around through microenterprise. Young
basketball legend Chris Tiu and other prominent personalities lent
their faces and support to these ads. “The poor are worth helping,
“The partnership built with PinoyME
Foundation inspires and encourages
us to continue and serve more of our
rural poor.”
REP. AYI HERNANDEZ, Executive Director
Katilingbanong Pamahandi sa Mindanaw
Foundation Inc. (KPMFI)
25
and if you give them a chance, they will prove that the effort to give them that chance is
well worth it.” This, Vistan says, is the message the campaign tried to bring across.
Donations began to come in. However, efforts were cut short by unforeseen events. The
illness and eventual passing of PMEF’s founder and main resource mobilizer, typhoons
Ondoy and Pepeng hitting the country in rapid succession, turning national and
international attention toward massive relief and rehabilitation, and snowballing events
related to the 2010 presidential elections made it impossible and inadvisable to direct
public giving toward microfinance.
Efforts to engage the public as investing partners will continue at a more auspicious time in 2010.
In the meantime, PMEF is also brokering relationships with other potential partners to
help it grow as a financial institution.
A Partner in Micro-Enterprise Development
Alongside efforts to grow its funds, PMEF is also helping some institutions in developing
new livelihood enterprise projects that can be implemented and/or scaled up through the SIF.
Tagbalay Foundation in Puerto Princesa requested PMEF to help them develop livelihood
projects for 12 indigenous tribal communities in Palawan. Petron Foundation approached
PMEF to set up a livelihood program for the barangays around its refinery in Limay, Bataan.
Simbayanan ni Maria, a large cooperative in Taguig with substantial assets, consulted
with PinoyME when it decided to venture into enterprise services for its 18,000 members.
PMEF is helping these three institutions with identifying potentials for economic activities,
project conceptualization, project feasibility analysis, links to groups with needed expertise,
and, in the near future, financing.
By entering into relationships with groups keen on micro-enterprise development, PMEF
helps push the boundaries of effective and sustainable enterprise, the kind that it hopes to
propagate through strategic financing. Through this experience, it plans to
develop a template in micro enterprise development that will enable it as well as other
institutions to scale up the promotion of economic activities among the poor.
A Mentor in Developing Financial Options
PMEF also cultivates relationships with MFIs. Through its financial advisory services,
PMEF offers the expertise of its board members and financial experts to MFIs interested in
developing financial strategies to increase their credit funds. These mentors are some of the
country’s leading experts in banking and business, offering a range and caliber of financial
services that growing MFIs would not otherwise be able to afford. MFIs interested in
creating new tracks of financing by tapping the capital market would benefit significantly
from these unique mentoring arrangements. The expert advisers donate their services to
PMEF while PMEF charges MFIs a modest fee for their services. The revenues earned by
PMEF from these services contribute to their sustainability as an organization.
Photos courtesy of KPMFI
26
PinoyME RESOURCE MOBILIZATION: The PinoyME Foundation
To date, there are already some MFIs engaged in these advisory
relationships. For many of the MFIs, the relationships are
eye-openers, an entire education in mainstream finance and
business. For the banking experts, the relationships are
opportunities to understand the world of microfinance and
apply their skills in creating more wealth for the wealthy to
now creating wealth for the poor.
By encouraging such relationships, PMEF takes steps towards
catalyzing the kind of inter-sectoral interaction needed to promote a more inclusive economic development.
Total Ally
Vistan says: “We hope to eventually grow into the kind of entity
that can be a total ally for microfinance: providing financial
support, technical assistance, market linkage … The sort of
entity that can help connect micro-entrepreneurs and
microfinance institutions to the sources of wherewithal that
will help them become truly viable.”
Company for the Journey
PinoyME Foundation (PMEF) provides credit service to a growing
community of MFIs. But it tries to offer this service in the context
of a larger relationship with these client MFIs. It is aware that
MFIs, particularly growing MFIs, need not just credit, but an ally
in the difficult journey of microfinance.
MFIs express their appreciation.
Co-journeyer”
Ayi Hernandez, Executive Director of Katilingbanong Pamahandi
sa Mindanaw Foundation Inc. (KPMFI) says: “KPMFI is a new
comer in social enterprise development. Thus, it needs the
company of a ‘co-journeyer’ as it pursues development and peace
in Mindanao through developing social enterprise models.
PinoyME Foundation was one of the few institutions that placed
its trust and confidence in KPMFI and became part of our journey.
PinoyME recognized and appreciated the needs of a young
organization that has big dreams for the Mindanawan.
PinoyME became part of the history of KPMFI, helping us
provide the financial assistance that will gradually boost the
capacities of farmers in optimizing their agri-productivity. This
growing partnership with PinoyME will help KPMFI become more
vigorous in its core business of transforming poor agricultural
households into micro-enterprise hubs--eventually creating a
community wealth that will promote a vibrant local economy.”
“The cooperative feels comfortable in partnering
with PinoyME because of the very accommodating
and supportive PinoyME staff. We aim for a long
and lasting partnership with PinoyME
Foundation.”
27
Divine Quemi, Chief Executive Officer
Nueva Segovia Consortium of Cooperatives (NSCC)
Impact
Hernandez goes on to describe the impact of PMEF intervention:
“PinoyME Foundation extended financial assistance to 163
farmers in Gingoog City and Municipalities of Claveria and
Magsaysay, Misamis Oriental (a total loan of Php 2,240,000 pesos).
The loan facilities were used to support and expand the poultry
houses of the backyard broiler growers, thus expanding chicken
production by an average of 75%. With this, farmers gained an
average additional income of PhP 3,500.00. Aside from giving these
direct benefits to the growers, the project also generated jobs for
local people (jobs as caretakers and laborers during the harvest
period).
She recalls: “PinoyME also offered financial assistance to members
who were affected by typhoon Pepeng. This financial assistance
will be used by the victims to start and maintain a livelihood
program. More than the services that they offer, however, we
appreciate how the Foundation is giving its all-out support to the
cooperative and the communities we serve. One example is when
we told them about a school in our area that was greatly devastated
by typhoon Pepeng. The Foundation immediately responded and
linked this concern to its network. Through PinoyME, the
renovation of the school was made possible.”
Thus he concludes: “The partnership built with PinoyME
Foundation inspires and encourages us to continue and serve
more of our rural poor.”
In addition, Quemi is also grateful of the solicitous attention of the
PMEF personnel. “The cooperative feels comfortable in partnering
with PinoyME because of the very accommodating and supportive
PinoyME staff,” she remarks.
Good opportunity
Accomplishing good things
Divine Quemi of the Nueva Segovia Consortium of Cooperatives
(NSCC) in Ilocos Sur also describes the partnership with PinoyME
as a “very good opportunity for the Cooperative,” saying that it
found PMEF’s services and programs beneficial.
She looks forward to more collaboration with PMEF. “Though our
partnership with this Foundation has just started,” she says, “we
were able to accomplish great things that benefited not only our
members but also the other sectors that we serve. We aim for a
long and lasting partnership with PinoyME Foundation.”
“The approval of our credit line provided additional funds for our
microfinance program,” she says. “The funds were disbursed to
small and medium entrepreneurs in the province of Ilocos Sur.
The money lent to borrowers was utilized as additional capital
for the improvment of their businesses. With the partnership on
microfinance, we were able to help hundreds of microentrepreneurs who are engaged in agriculture and small scale
businesses.”
More than just credit
Quemi is particularly grateful for the help that PMEF gave the
cooperative after the devastation of Typhoon Pepeng.
28
PARTNERS
ations
ment Organiz
Microfinance
Institutions
n
nd Non-Gover
Foundations a
Foundation
Ang - Hortaleza
t Foundation
isi Developmen
ation, Inc.
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Ad Jesum Dev
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Alalay
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Catholic Relie
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(C
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Ec
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DESPA
Center for Agr
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Fundacion CO
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Tr
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it
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m
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dation USA
fo
Inc.
Center
Grameen Foun
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U
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Fo
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Hagda
Buhay, In
anns Seidel un
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sa
Kabalikat Para
enter
Hapinoy
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D
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K
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Kasagan
vations for Pove
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In
c.
In
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In
n,
een,
ndatio
ent Foundation
c Analysis, Inc.
Kazama Gram
Mindanao Fou
SOL Developm
Sa
IN
di
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and Econometri
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Pa
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Katiling
Institute for
Church and So
on
te
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In
F
ll
(KPM
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John J. Carro
purpose Coope
te Foundations
ves
ti
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Laua-an Multi
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ague of Corpora
of
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Nueva Segovia
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Tulay sa Pag-U
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Uplift Philippin
Peace and Equi
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Petron Founda
Progress
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N
ness for Social
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Bu
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Assistance Prog
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Philippine
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dation
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Northeast Luzo
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Bicol Microfin
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Mindanao Mic
Philippines
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of
ouncil
Microfinance C
29
institution
Government
s
t of Agriculture
ncil, Departmen
ou
C
y
lic
Po
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redi
t Studies
Agricultural C
for Developmen
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it
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Finance
In
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in
Philipp
Department of
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C
t
di
Cre
DOF-National
orp.
and Finance C
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s
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People
Business
Accenture
ications, Inc.
ABS-CBN Publ
Ayala Corp.
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ilippine Island
Bank of the Ph
ilippines
Ph
e
th
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A
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Ba
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Directories Ph
s
Echostore
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Robeniol Sant
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MapCentral
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Makati Busine
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ssociation of th
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Managemen
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One Asia Touc
PHINMA
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Planters Devel
PLDT
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San Miguel Cor
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Smart Com
SME.com
and Velayo
Sycip, Gorres
UCPB-CIIF
Maybridge
IDEASOFT
Academe
City
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Araullo Univers
Bicol University
lege, Davao City
Brokenshire Col
State University
atuan City
Central Luzon
ception, Caban
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College of Im
and Econometri
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Institute for
dustries
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fo
te
itu
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In
PU
Individuals
eo
Jan Chavez-Arc
hi
gc
Ba
Sumit
acan
Dr. Arsenio Balis
Bobby Claudio
Joey Bermudez
ta
Richard Estues
Geron
ad
ed
Pi
Dr. Ma.
Edmund Go
Bart Guingona
to
se Access to
Dr. Gilbert Llan
- Microenterpri
in
or
lc
ta
Pe
ny
Antho
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Banking Servic
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Ronna Reyes-S
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an
ri
So
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Edmun
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Ta
Ruben
Erwin Tiongson
dation USA
Grameen Foun
Marie Valdez -
30
PinoyME Consortium Steering Committee
Dr. Jaime Aristotle Alip
Managing Director, CARD - MRI
Manuel Pangilinan
Chair, Philippine Long Distance Company
Ronald Chua
Professor, Asian Institute of Management
Fr. Anton Pascual
Executive Director, CARITAS Manila
Amb. Howard Dee
Chair, Assisi Development Foundation
Amb. Albert del Rosario
Former Philippine Ambassador to the United States
Josias dela Cruz
Vice-President for Microfinance, Bank of the Philippine Islands
Ramon del Rosario, Jr.
President and CEO, PHINMA Group
Victoria Garchitorena
President, Ayala Foundation
Aniceto Sobrepeña
President, Metrobank Foundation
Atty. Ramon Garcia
Corporate Secretary, Ninoy and Cory Aquino Foundation
Washington Sycip
Founder, Sycip, Gorres and Velayo
Edward Go
Chair, ASA Philippines Foundation
Amb. Jesus Tambunting
Chair and President, Planters Development Bank
Daniel Lacson, Jr.
Chairman Emeritus, Negros Navigation
Veronica Villavicencio
Executive Director, Peace and Equity Foundation
Dr. Cayetano Paderanga, Jr.
Chair, Institute for Development and Econometric Analysis
Deogracias Vistan
President, Creamline
PinoyME Foundation Staff
Danilo A. Songco
President and CEO
Andres Ruba, Jr.
Credit and Investment Officer
Lailani Concepcion
Technical Assistant
Angelica Espinosa
Technical Assistant
Edward M. Martinez
Finance and Administration Officer
Agnes Balatayo
Finance and Administration Assistant
PinoyME Foundation Board of Trustees
TRUSTEES
Senen C. Bacani
Chair, La Fruitera, Inc
2007 Ernst and Young Entrepreneur of the Year
Victoria P. Garchitorena
Rafael C. Lopa
Executive Director,
Ninoy and Cory Aquino Foundation
CHAIR EMERITUS
H.E. Corazon C. Aquino
CHAIR
Juan Miguel Luz
Director, Center for Development Management,
Asian Institute of Management
Vitaliano N. Nañagas II
Former Chair, Development Bank of the Philippines
Deogracias N. Vistan
Manuel V. Pangilinan
PRESIDENT & CEO
Amb. Albert F. del Rosario
Danilo A. Songco
Ramon del R. Rosario, Jr.
Aniceto M. Sobrepeña
Washington Z. Sycip
Amb. Jesus P. Tambunting
Veronica F. Villavicencio
Daniel Lacson, Jr.
CORPORATE SECRETARY
Atty. Jose Feria, Jr.