My name is Eric Miller and I had the pleasure of working with the USAID-supported RBAP-MABS Program this summer as I continue my business and public policy graduate studies at the University of Maryland, right outside of Washington, DC.  You may have heard from me over the past few months – I wrote a number of blog articles under the title “Guest Blogger”.  I wanted to share a few thoughts and reflections from this extraordinary experience.

I never heard of microfinance before starting business school last year.  However, after attending numerous panel sessions and discussions on the topic, including a Muhammad Yunus speech, I began to believe in the power of credit in fighting poverty.  But I wanted to see it for myself.

The first week of my internship, I attended the RBAP annual convention and the MABS national roundtable.  What an introduction to microfinance in the Philippines!  One of the first important lessons that I learned during that week is that microfinance is not just about providing micro-loans to underserved entrepreneurs.  It is about including them in all aspects of financing – deposit services, insurance, housing loans, micro-agri loans and financial education.   Another fascinating part of USAID’s RBAP-MABS program is the innovative technology it has introduced with the help of its partner companies.  For instance, GCash provides micro-entrepreneurs¬ with the ability to conduct their banking through mobile phones via SMS messages.  This service is truly expanding the bank’s microfinance services.  It is easier, cheaper and safer to make transactions using mobile technology.  Finally, I immediately was impressed by the supportive regulatory environment that the Bangko Sentral ng Pilipinas provides the microfinance industry, encouraging innovation and private sector involvement.

One of the true highlights of the summer was visiting Cantilan Bank for its 30th anniversary celebration.  I had the opportunity to go out in the field and meet clients who benefited from Cantilan’s microfinance services.

I met owners of pharmacies, sari-sari stores and pawnshops who provide cash-in/cash-out services, making remittance transactions cheaper and more secure.  I met housing microfinance clients who use micro-loans to build new homes or improve their existing homes, providing them with the confidence they need to develop as a small business owner.  I met a farmer who uses micro-agri loans to help her family expand its farming business.

This was truly an eye-opening experience, witnessing firsthand how so many are benefiting from the great work the bank is doing day-in and day-out.   Thank you Cantilan Bank for being such gracious hosts!

I also visited Bangko Kabayan, a rural bank in the province of Batangas.   We went to study how the bank has been so successful in their group lending program.  I visited two center meetings on Thursday and we discovered three keys to the success of Bangko Kabayan’s group lending program:  1) providing a demand-driven product, 2) developing a wide range of products in its portfolio, such as educational and medical emergency loans, and 3) the center fund, a pooled account that each member deposits into weekly, used for parties, field trips, business development training and other events that keep members interested, educated and active.  It was great to observe how microfinance is not only providing capital, but how it is empowering women and building communities.

I joined a team of MABS specialists down in Cebu for a group lending transition workshop.  Market research has consistently shown that the group lending product must be adjusted to the current needs of microfinance clients.  During the workshop, I had the opportunity to travel to two group lending meetings where the rural bankers had the opportunity to test out the market research skills they learned in the classroom.  Based on the interviews, we learned that the borrowers did not like the tapal system (or being liable for the loans of others).  Additionally, they thought the meetings were too long and they suggested that the bank offer them other financial products, such as insurance, education loans and the ability to access emergency loans.  My dear co-workers even allowed me to run a few sessions during the workshop.  It was a great experience all around.

Besides absorbing all of this rich knowledge of microfinance, my big project for the summer was compiling three years of training materials, presentations and other resources into an updated DVD toolkit.  And boy there has been a lot of activity since 2007.  I hope you find this toolkit useful.

I have had the opportunity to travel to many places across this remarkably beautiful country:  weekends at the beaches of Bohol and Boracay, a mountain adventure in the rice terraces and caves of Banaue and Sagada, and other trips to Clark, Subic, Cebu and Surigao.  I promise I will be one of the most vocal advocates of the Philippines and hope to convince my American friends to explore your country.

Muhammad Yunus once said that poverty is not a function of the person, but a function of the system.  I am not sure I could have truly appreciated the meaning of this quote if I hadn’t worked in the Philippines this summer and visited the hard-working micro-entrepreneurs throughout the countryside that were able to build their businesses because of inexpensive access to financial services.  We let poverty occur because we have this preconceived notion that poor people are not credit-worthy, that they are not responsible enough to bring them into the economy.  Poverty will never be eradicated if we continue to think this way.

What shocked me most when I first arrived at my apartment in Ermita was the amount of poverty on the streets.  Many Filipinos leave the provinces hoping to make a better life for their family in Manila, but just end up sleeping on the streets at night while overpopulating the city.   This is why it is so important to build up opportunities for micro-entrepreneurs in the countryside – to encourage Filipinos to stay in the provinces and make them believe that there is opportunity for a better life right where they live.  I applaud the success of the USAID-supported RBAP-MABS Program, the supportive regulatory environment of the Bangko Sentral ng Pilipinas and the 70 participating rural banks that have made the Philippines into a compelling case study of how microfinance can transform the lives of individuals from the small cities of the provinces to the most remote, underserved communities in the country.

John, Mely and the entire MABS Staff – thank you for this unforgettable experience and the opportunity to be a part of such an inspiring program.

Mabuhay ang Pilipinas!

Dear MCPI Members and Partners,

The Philippine Center for Entrepreneurship – Go Negosyo is currently searching for the country’s most outstanding Filipino entrepreneurs all over the Philippines who will be recognized for their inspiring entrepreneurial stories, enterprising mindset and attitude, innovation and creativity, and the positive impact of their businesses to the community.

The MVP Bossing Awards organized by the PLDT SME Nation in partnership with PCE-Go Negosyo is a nationwide search for the country’s outstanding Small and Medium Entrepreneurs (SMEs) who continuously work hard by tapping skill, creativity, technology, and the right attitude, in order to succeed in their respective business ventures. There will be a total of 15 winners from different categories, of which only one will be hailed as the Grand MVP Bossing Awardee who will receive P500,000.00 cash prize, 2-year PLDT myDSL Biz service, and a trophy. Nomination period is July 26 to September 28, 2010.

The 2010 Go Negosyo Inspiring Young Filipino Entrepreneurs spearheaded by the Philippine Center for Entrepreneurship is a nationwide search to recognize inspiring role models for the youth aged 35 years old or below. From 20 national finalists, ten (10) will be chosen as awardees. The nominating Regional Director/Provincial Director will also be recognized together with the awardee during the 2nd Youth Entrepreneurship Summit on September 27, 2010 at the World Trade Center. Nomination period is August 11 to September 11, 2010.

As we continue to spread the entrepreneurship advocacy to promote MSMEs, we would like to invite your office to nominate the most inspiring entrepreneurs of your respective regions/provinces. Attached are the nomination kits of the abovementioned searches.

Should you have further inquiries, please feel free to contact Paul Andrew Gorgonio at 0999-3900688 or (02) 637-9229.

We look forward to your active participation. Thank you very much.

Very truly yours,

JOSE MA. A. CONCEPCION III

Founder

PHILIPPINE CENTER FOR ENTREPRENEURSHIP

Download Go Negosyo Inspiring Young Filipino Entrepreneurs Nomination Kit

More rural banks are now preparing to offer housing microfinance (HMF) services as RBAP-MABS trains its third batch of bankers on market research for the HMF loan product. Twenty-five (25) participants from 9 rural banks interested in developing housing microfinance services for their clients attended the training held on August 25-27 in Mallig, Isabela.

Held as a collaborative effort of the USAID-supported RBAP-MABS Program and its certified service providers, Punla sa Tao Foundation and Microfinance Innovation Center for Resource and Alternatives (MICRA), the training was initiated by Ms. Praxedes Ignacio, President of the Northeast Luzon Microfinance Council.

The rural banks and microfinance institutions represented in the training were Rural Bank of Mabitac, Philippine Rural Banking Corp. (PR Bank), Mallig Plains Rural Bank, Agri-Business Rural Bank, Cagayan Valley Cooperative Bank, Rural Bank of Luna (Kalinga-Apayao), North Pacific Banking Corp. (a Rural Bank), Rural Bank of Maddela and Nueva Segovia Consortium of Cooperatives.

While the focus of the training was on conducting market research to prepare for housing microfinance services, also it also included updates on cash flow analysis for the benefit of the trainees. Cashflow-based lending is at the heart of the RBAP-MABS Approach and allows banks to more appropriately determine the debt capacity of their clients.

The participants received training on the tools for market research with hands-on practice on survey data gathering, processing and analyzing. “It’s a very engaging, informative and helpful workshop for our bank, especially the market research tips,” Ms. Kimberly Cabbigat (Agri-Business Rural Bank) said after the training workshop. The participants reinforced this statement as they further asserted that the workshop helped them with hands-on experiences in analyzing market research data collected in the field.

Mr. Caloy Pasion, the Executive Vice-President of PR Bank shared, “I am happy to say that I appreciate and thanked the facilitators as the training provided very interesting topics and helped get my staff involved.”

The training event is the first module for banks planning to develop and offer housing microfinance services. HMF is a new service that banks are now actively pursuing after the issuance of BSP Circular 678 early this year.  The participants will now work over the next month in conducting their own market research for their banks. After this research, the participants will again gather to participate in the second module for the housing microfinance product development course, where the participants will prepare their business plans, strategies and operation manuals.

The RBAP-MABS Program is supported by the United States Agency for International Development (USAID). As of June 2010, RBAP-MABS participating banks have already disbursed more than 1,665 housing microfinance loans totaling more than PhP 52.04 million.

Bangko Mabuhay together with G-Xchange Inc. (GXI), a wholly-owned mobile commerce subsidiary of Globe Telecom, brings the benefits of mobile money and convenient remittance pay-out options in Cavite.

Using the GCASH platform, its branches serve as cash-in and cash-out facilities for customers who would like to take advantage of the convenience that mobile money transfer offers. Bangko Mabuhay is also an active pay-out outlet for GCASH REMIT, cash pick-up remittance service under GXI.

Bangko Mabuhay, registered as Rural Bank of Tanza (Cavite), Inc., has over P900M in assets serving thousands of clients in the province.

See full section printed on Philippine Star on August 27, 2010.

RBAP-MABS Microinsurance Coordinator Ruth Aseron shared the experiences of rural banks and their insurance partners in microinsurance distribution at the Microinsurance Asian Summit held on August 3-5, 2010 at the Grand Copthorne Waterfront Hotel, Singapore.

Organized by Hanson Wade, the event convened leaders and representatives of established institutions and new entrants to the emerging industry of microinsurance.  Present at the event was a diversity of key private institutions comprised of underwriters and insurance providers, reinsurers, social investors, technology solutions providers, NGO MFIs, foreign donor agencies and technical assistance providers.

A significant interest of participants at the event was the potential convergence of rural banks’ mobile phone banking  and microinsurance services to facilitate cost-efficient payment, administration and claims while partnering with private insurance companies in order to increase access and reduce the costs of managing small accounts.

Secretary General Yoshi Kawai of the International Association of Insurance Supervisors (IAIS) opened the 2-day conference with a discussion on the G20 Initiatives on Microinsurance and the significance of developing relevant policies and regulations founded on financial inclusion and poverty alleviation. This established the theme of the conference as speakers evinced social entrepreneurship with discussions on sustainability of microinsurance products balanced with addressing risk protection needs of the “middle poor” or “mass market”.

The three-day event included workshops that allowed participants to analyze and share experiences from around the region on effective microinsurance product development and distribution.

On August 17-20, the USAID-supported RBAP-MABS program team conducted an operations review of two of its participating banks based in the Bicol Region: the Rural Bank of San Vicente and the Rural Bank of Jose Panganiban. The operations and product review was conducted to assess the banks’ performance and present the status of their microfinance loan products. RBAP-MABS evaluated the banks’ microfinance delivery systems, loan documentation, and Management Information System (MIS). Using this evaluation, the team worked with the bank in recommending improvements for the products’ design and operational system.

Based in Camarines Norte, both banks serve thousands of clients in the area. RB San Vicente serves the microenterpreneurs of Daet, San Vicente and Labo, while RB Jose Panganiban caters to the needs of microenterprise clients in Paracale and Jose Panganiban.  Both banks have a branch in Daet, the provincial capital.

The management of RB San Vicente and of RB Jose Panganiban both wish to expand their respective banks’ microfinance operations by offering additional products such as agricultural microfinance, housing microfinance, and microinsurance to their microenterprise clients and to the small farmers in Camarines Norte.  With enhancements to their microfinance product and additional new product offerings, the banks will be able to reach out to more clients and expand their operations in Camarines Norte.

Manila Times – RBAP’s research and training arm, the Rural Bankers Research and Development Foundation, Inc. (RBRDFI), will receive a US$ 100,000 grant from the Interna-tional Labor Organization (ILO) under the Micro-insurance Inno-vation Facility. This collaboration aims to support RBAP members in partnering with insurance compa-nies to offer micro-insurance.

Housed at the ILO’s Social Finance Programme, the Micro-insurance Innovation Facility seeks to increase the availability of quality insurance for the developing world’s low-income families, helping them guard against risks and overcome poverty. The Facility facility was launched in 2008 with the support of a grant from the Bill & Melinda Gates Foundation.

This new partnership with the ILO will support training and technical assistance for rural banks to become licensed micro-insurance agents. It will help provide micro-insurance access to potentially millions of rural bank clients and their dependents. This initiative will also support RBRDFI in offering a turnkey approach to ensure rural banks’ cost-efficient compliance with licensing and capability-building requirements as institutional micro-insurance agents. Rural banks will facilitate marketing, selling and servicing of micro-insurance, with the commercial insurance companies issuing the policies.

The partnership with the ILO and the Gates Foundation will expand RBAP’s intiativeinitiative to provide support to member rural banks and reinforces the unique position and important role that rural banks across the country have in providing social protection to the most vulnerable. Through micro-insurance, rural banks would be able tocan provide the assurance and protection that in case of a peril or tragedy, the poor will not become poorer or those who have succeeded in improving their lives will not become impoverished once again.

Read the complete article on Manila Times online.

Philippine Star – The Rural Bankers Research and Development Foundation Inc. (RBRDFI) will receive a $100,000 (roughly P4.6 million) grant from the International Labor Organization (ILO) under the Microinsurance Innovation Facility. The facility was launched in 2008 with the support of a grant from the Bill & Melinda Gates Foundation.

On the other hand, the RBRDFI is the research and training arm of the Rural Bankers Association of the Philippines (RBAP), which has gained international attention in its efforts in microfinance, mobile banking and poverty alleviation.

The grant will support RBAP members in partnering with insurance companies to offer microinsurance to its six million bank clients nationwide.

“With the help the facility, rural banks can introduce quality insurance for the low-income families, thus helping them guard against risks and overcome poverty,” the ILO said in a statement released by the Microenterprise Access to Banking Services (MABS) Program. The program is a joint effort of the United States Agency for international Development (USAID) and the RBAP.

Read the complete article on Philippine Star online

A study group from Pakistan visited the Philippines on August 9-13 to get an in-depth perspective of the Philippine microfinance industry. Composed of nine senior managers from microfinance oriented banks and other microfinance institutions of the Pakistan Microfinance Network (PMN), the visit focused on savings mobilization practices and mobile phone banking services offered by rural banks.

On August 9, the delegates visited the Rural Bankers Association of the Philippines (RBAP) and the Bangko Sentral ng Pilipinas (BSP) for a walk through of the country’s current microfinance climate. RBAP-MABS provided a presentation of rural banks’ successful delivery of banking services to microfinance clients in the countryside, and shared experiences on savings mobilization strategies as well as mobile phone banking services via mobile money.

The study group then visited various rural banks to learn about their products and activities for increasing deposit levels and encouraging small savers through innovations and incentives. Among the rural banks that the study group visited were Green Bank of Caraga and CARD Bank.

The group inquired about the unique strategies of both banks in attracting and managing hundreds of thousands of small deposit accounts. They also studied the technological innovations used in banking, including mobile phone banking services such as Text-A-Deposit, Text-A-Withdrawal and SMS updates being offered by rural banks to their clients.

RBAP-MABS conducted a Senior Management Orientation (SMO) for the Chamber of La Union Rural Bankers (CLURB) on August 11 to provide all interested member rural banks with an overview of the MABS Program and the MABS Approach to Microfinance.

Thirteen rural banks participated in the activity: Bannawag Bank, La Union Development Bank, Rang-ay Bank, Rural Bank of Luna, Cooperative Rural Bank of San Gabriel, Rural Bank of Bacnotan, Cooperative Bank of La Union, Rural Bank of Agoo, Rural Bank of Sudipen, Rural Bank of Caba, Rural Bank of Bauang, Rural Bank of Bangan, and Rural Bank of Rosario. The team provided an understanding of how the MABS Approach can be used to assist rural banks to develop their capacity to more effectively provide microfinance services in their respective communities. The Federation was quite interested in exploring ways to group together to more effectively share in the costs of bringing the MABS Approach training modules to La Union for the benefit of all of their interested member rural banks.

A follow up SMO was also conducted for the Board of Directors of Rural Bank of Rosario (La Union) Inc. on August 12. Fifteen participants from the bank’s management and staff attended the orientation held at the bank’s main office. Among them were the bank’s chairman, Mr. Jesus Tabora; bank president, Mr. Nicholas Tabora; members of the Board of Directors; senior officers from different departments; and the branch managers of all of the bank’s five branches.

The first of the MABS Approach to Microfinance modules, the SMO introduces bank officers and key personnel to the important stages of developing new microfinance products and services including market research, product development, loan administration and management, pilot testing, and operations review. A representative from the Microfinance Innovation Center for Resources and Alternatives (MICRA) Philippines, one of the three MABS Service Providers, also presented an overview on their training program and other initiatives. After the SMO, the bank officers expressed their interest in joining the group training for the MABS Approach with MICRA, along with three other rural banks.

RBAP-MABS has been supported by United States Agency for International Development (USAID) since 1997 and has been the main vehicle for RBAP to provide microfinance product development and best practice training to well over 300 member rural banks across the Philippines.