Grameen Foundation : Resource Center : Print Newsletter : Summer 2004 : Opportunities for Philippine Poor
GFUSA Investment Creates Opportunities for Philippine Poor
Breakthrough agreement means microloans for 28,000 impoverished families
Once again, Grameen Foundation USA (GFUSA) is the catalyst for a dramatic financial breakthrough that will improve the lives of the poorest of the poor--this time in the Philippines.
As a result, small loans and other financial services to help break the bonds of poverty will be made available for an additional 28,000 impoverished Philippine families.
The breakthrough is possible because, with funding from philanthropists, GFUSA made a loan of $410,000 in December 2003 to a leading MFI, the Center for Agriculture and Rural Development (CARD). CARD has used the loan as the guarantee to leverage an $820,000 line of credit extended by the Land Bank of the Philippines--the first transaction of its kind ever made by the Land Bank.
It will mean that CARD can make more poverty-defeating loans to women like Anna Cecelia Marcaida. Before joining CARD, Anna Cecelia and her husband subsisted on just $3.60 a day to feed and clothe their four young children. Starting with a loan of $36, she began to expand her dry goods store. With hard work and determination--and later, larger loans from CARD--she grew her business and bought a used Jeep to run a taxi service. Today she has a plot of land, a house with indoor plumbing, and nearly $4,000 in capital in her store.
CARD, a non-governmental organization (NGO), will use the line of credit from the Land Bank to expand its loan-making capabilities as it adds new branches in some of the Philippines’ poorest provinces--Camarines Sur, Mindoro Occidental, and Quezon. GFUSA’s previous financial and technical investments in CARD have helped it grow from serving about 27,000 clients to over 72,000 in the past three years. CARD’s sweeping plans for the future are even more ambitious: it seeks to reach 600,000 new borrowers by 2008, giving them the means to achieve self-sufficiency.
GFUSA worked closely with CARD to analyze its expansion plans and identify cost-saving measures that will permit establishment of 15 new branches--six more than originally estimated--over the next seven years with the newly-secured funds. Within three years, each branch will be operationally and financially self-sufficient. CARD will use the revenues generated to repay its loan to GFUSA and establish additional branches to reach more of Philippines’ poorest families.
PARTNERING WITH MFIs TO INCREASE OUTREACH, EFFICIENCY
After India, the Philippines is home to the largest number of Grameen-style microfinance institutions (MFIs) in the world. CARD and other leading institutions, including Negros Women for Tomorrow Foundation (NWTF), Ahon Sa Hirap, Inc. (ASHI), and Tulay Sa Pag-ulad Development Corporation (TSPI) are aggressively scaling up their efforts to provide more poor families with financial services. GFUSA partners with these institutions to help them reach new levels of outreach and efficiency. The impact of microfinance in the Philippines has been dramatic: A 2000 assessment of ASHI showed that a full 20 percent of clients cross the poverty line by their fourth loan cycle.
GFUSA recently partnered with the American Express Foundation to enable ASHI and TSPI to strengthen information technology capabilities by upgrading their computer hardware and software. The resulting improvements are expected to increase operational efficiency, reduce the risk of fraud, and enable ASHI and TSPI to expand their services to more women living in poverty.
GFUSA’s pioneering support of innovation--whether groundbreaking financial agreements or information technology--is crucial to the future of the Philippine microfinance industry. We are committed to helping the industry reach the millions of families who can benefit from financial services but currently lack access. The need is greater than ever.
More Information...
For more information on GFUSA’s microcredit efforts in the Philippines, contact Dr. Mike Getubig, Jr. at igetubig@gfusa.org or (202) 628-3560, ext. 106.
Grameen Foundation : Resource Center : Print Newsletter : Summer 2004 : Opportunities for Philippine Poor
Grameen Foundation uses microfinance and innovative technology to fight global poverty and bring opportunities to the world's poorest people. With tiny loans and financial services, we help the poor, mostly women, start businesses and escape poverty. Our global network of 55 microfinance institution (MFI) partners including our Growth Guarantee partners has touched more than 34 million people in 24 countries. In addition, we introduced and now sustain technology initiatives (Mifos and Village Phone) in Cameroon, Kenya, Rwanda, and Uganda, bringing our total country outreach to 28.
+1-202-628-3560 www.grameenfoundation.org
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