Microfinance
MICRO-ENTERPRISE
1990 target objectives
Extension and expansion of credit program throughout South Cotabato
for SCFI beneficiaries and confederate them for the establishment of people’s bank.
To generate income at least P500,000.00 interest income (net) for five year operation.
1999
Extension and expansion of credit program using Association for System Advancement Approach (ASA) throughout Koronadal, other part of SOCSARGEN for SCFI partners and confederate them for the establishment of peoples’ bank.
Consolidation of program beneficiaries and resources in order to generate income of at least (P1,000,000.00) interest income (net) for each year of operation starting on the 1st year of program plan implementation. Setting-up schemes for linkage to organized centers to banks for financial assistance.
1. MICROFINANCE PROJECT
This is a pilot project started last June 1998 using Grameen Banking Approach originated from Bangladesh. It was implemented in Barangay Caloocan and Zone I Koronadal, South Cotabato. Target clients were women with small business which aims to alleviate poverty and to help women improved their standard of living through provision of loans and forced savings.
Last June 1999, another microfinance approach was introduced which is association for social advancement (ASA) . This approach was also originated from Banglades. SCFI study its uniqueness in strategies and simpleness. On August 1999, pilot areas spread all over the nearest barangay of Koronadal.
On September 1999, the project formally recruiting, women and last August 2000 two (2) branches were opened, Tupi and Surallah, South Cotabato using Association for Social Advancement (ASA) approach.
2002
Extension and expansion of credit program adopting the technology of
Association for Social Advancement (ASA) as an approach. The implementation
of the program that provided easy access capital among women sector will cover
the area of SOCSARGEN. It is envisioned that the program will attain 10,000
members confederate all its assisted beneficiary groups and eventually establish
its own peoples bank. The (6000) members are encourage to increase their CBU
in order for them to become self-reliant and self-sustaining as the partner
members as well as the organization.
MICROFINANCE PROJECT
Objectives:
- caters the needs o various organized cooperatives and association in terms of livelihood development and capital support.
- It aims to eradicate poverty and help women and other rural and urban sectors improved their standard of living through provisions of easy access loan and savings mobilization
- The program aims to make women borrower to become self-reliant as well as the SCFI organization
- The program focuses on the Association for Social Advancement (ASA) Approach a modified model of approaches in microfinance project
- Assistance to the husband farmer of the beneficiaries avail a loan to support their farm production using affordable and effective improved bio-organic fertilizer produced at SCFI Demo Farm
Outputs
- Adopted various approaches and methodologies such as Grameen Banking Approach (the approach was not sustainable and efficient)
- ASA technology was introduced were adopted and implemented has expanded and organized five (5) branches in SOCSKSARGEN area
- At least 6000 beneficiaries avail in the program
- Middle of 2003 farmers were included in the program
- December 2004 - 10,790 comulative clients, 3,875 are active
- Enables the women sector to access credit and mobilized savings
- Has sustained the operation of six (6) branches strategically located in the provinces of South Cotabato, Sultan Kudarat, Saranggani, and Maguindanao
- Able to assist different projects of the clients
- Adopting an Association of Social Advancement Approach (ASA)
- Expanded program – provide production assistance to farmers
- Loan component includes cash and organic fertilizers
- 302 farmers who availed this assistance
- Total collectibles is P 3,752.841.00
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The project was funded by UNDP – PCFC P1.8M
The project started last 1998.
Areas being served: Koronadal, Surallah, Sto. Nino, Banga, Norala, Polomolo And Tupi, South Cotabato Tacurong City, Lambayong, President Quirino, Isulan, Esperanza and Bagumbayan, Sultan Kudarat
Buluan Maguindanao.
The Micro-enterprise Development and
Micro-finance Program
At the very beginning of its operation, SCFI believed that it should engage in micro-enterprise development and micro-finance, knowing that one of the poverty sectors that it should reach out was the micro-entrepreneurs. In fact, at the onset of its operation, SCFI already identified the micro-entrepreneurs as one of the three poverty groups (the two being upland farmers and marginal fisherfolks) that it should focus on.
Bong Garrucho, the organizer and first Executive Director of SCFI, believed then that the foundation should engage in micro-enterprise development and micro-finance as a way of contributing to attaining its mission of “developing underdeveloped communities and transform them into productive and self-reliant associations.” Bong knew, too, that engaging in such development endeavors could provide SCFI the opportunities and the potentials to permanently generate resources to sustain its operation as a development-oriented non-government organization (NGO).
As a welfare and social development institution, the financial resources of SCFI could be limited only from funding agencies and donors. And these sources are highly unpredictable and tentative. On the other hand, it would be difficult also for SCFI to engage mainly in income-generating or profit-making ventures given its status, and its reason for being. Engaging in micro-enterprise development and micro-finance program may integrate the two concerns of contributing to community development while self-generating resources for continuing operations.
The Beginnings
Thus, SCFI started engaging in micro-enterprise development in 1988, with funding assistance from the Philippine Business for Social Progress (PBSP). The project intended to organize the market vendors in Koronadal and in Banga, South Cotabato and provide them with entrepreneurial skills training and the initial revolving business capital fund. This revolving fund would be used to provide low-interest loan assistance and wean the members (small retailers, vendors, and others) from their dependency on “loan sharks” or usurious lenders.
The strategy was for the vendors to become organized and registered into associations and then be provided with proper education and training to administer, manage, and operate their own lending and savings project using the initial fund from PBSP. Thus, was born the Koronadal Businessmen Association, Inc. and the Banga Businessmen Association, Inc. PBSP provided SCFI with a financial grant of P70,000 to train the associations in operating and managing their own micro-finance projects, and with a financial loan of P230,000 as initial capital – which was turned over to the associations for their respective micro-finance operations.
For several years that they were operating, the associations were able to serve more than 300 clients. They were operating on very promising trend, generating savings and income that were continually added to their revolving loan fund.
Unfortunately, however, organizational problems and operational difficulties set in after SCFI completely turned over the project management to the respective associations. The problem was so deep-seated that the operations of the two associations had to be prematurely stopped in the early 1990s.
But SCFI’s micro-enterprise development and micro-finance project continued with direct financial assistance from other funding donors and partners. In 1988, SCFI was contracted by the Department of Trade and Industry (DTI) in the implementation of its micro-lending project, the Tulong sa Tao (TST)-Self-employment and Livelihood Assistance (SELA). The project continued up to 1993, enabling SCFI to reach out to more micro-entrepreneur-clients in Koronadal and other towns of South Cotabato.
