PAGASA Philippines Lending Company, Inc. (PPLCI) is an institution providing microfinance services to low income people in the Philippines. PPLCI is a subsidiary of ASA International, one of the largest Microfinance Institution in the world that operates in the Philippines, Nigeria, Ghana, Sri Lanka, India, Pakistan, Cambodia, Kenya, Uganda, Myanmar, Rwanda, Sierra Leone and Tanzania.  It is a duly registered company with Securities and Exchange Commission holding SEC Registration No. CS200708977 approved on June 7, 2007 under its former name Catalyst Microfinance Investors Philippines, Inc. (CMIPI).

PPLCI seeks to pursue its mission in providing micro credit services to economically poor entrepreneur Filipinos and aims to empower them  by helping them access credit for their income generating activity, help increase family income that will improve their economic condition and become social investors in community development using the well-known ASA Methodology. It also aims to create employment for the community and/or locality supporting micro projects to the members and job placement in the company.

PPLCI envisioned serving more micro-entrepreneurs in the country by expanding its operation all throughout the country particularly in the countryside area and aim to reach millions of borrowers through the following company key strategies:

• Efficient fund utilization and effective internal control;
• External linkaging for resource or fund generation;
• Cost effectiveness for sustainability and continuous staff development;
• Experienced senior management in the field of microfinance;
• Lean organizational structure and standardized product and services and scalability in the operation.

Philippines area of operation

She starts her day by going to the public market and checking out items that she would sell not only in her neighborhood but to the entire community in Atok Trail in Baguio, the summer capital of the Philippines. Limay Carrera, 43 years old, a native of the mountain province, remembers the first time she ventured into the business of repacking things from foodstuffs and knickknacks that she could sell to kids at her area and the nearby elementary school.

From being a sole operator doing the buying, packing up to peddling, Limay’s business has now expanded selling anything from toys, dried baby squid, dilis (small dried fish), garlic, onions and pepper and all kinds of canned goods.

Limay was 21 years old when both parents died and had to stop her 3rd year schooling of accountancy. Being the 10th child of 11 brothers and sisters she was exposed on trading business by her family. Over the years, she learned the ropes of the business. By the time she turned 23, she got married and decided to go on her own. However, her married life was not successful. Her husband went with another woman and left with her was their only son, now 21 years old.

With her growing business, Limay needed more capital infusion. It was then that she decided to joinPagasa Philippines Lending Company, Inc. about four years ago. She started from Php5,000 which was granted in September 30, 2010. She is now on her 10th loan amounting to Php21,000 and planning to apply on Small Business Loan after finishing her current loan.

“There were many lenders when I started my business, promising all sorts of schemes and incentives. Borrowing was easy,” Limay shares.

But she was always cautious. Wary of getting into the debt trap, Limay said she scrutinized lending schemes before availing of them.

“It was a wise decision for me to go with Pagasa Philippines Lending Company. Looking back, I made the right decision to partner with them (Pagasa). They have helped me a lot because their loans and savings packages are friendly for poor people like us,” Limay points out.

She says that the staff explains the entire borrowing process to us from the amount we want to borrow and the payment schemes involve, including loan packages that are available. Since she started her business, Limay is proud that the small trading business has been profitable for her.

“Although profit is small, I feel proud to have my small grocery”, she says.

Pagasa has identified Limay as one of the company’s valued client and borrower. They have seen her business grow since she started partnering with Pagasa. She was not also spared from the impact of number of typhoons which that time has a ten thousand pesos loan but was able to recover.

Despite the steady growth in her trading business, Limay’s’ goals are still fairly ambitious, she claims. But at the same time, she feels that her goals have to be high to make it worthwhile to achieve it. Make no mistake; Limay Carrera continues to be upbeat and raring to go. She is involving her son in the business since son is not interested to finish his studies. She believes that managing the same business would only be the greatest treasure she could provide to his son.

It is due to lack of financial support from her family that she failed to finish and complete her General Radio and Communication course/degree rather, Eliza Usman tried her luck working in a children’s garment factory from where she met her husband Mr. Augusto Usman who is a polio victim employed in the same company as a tailor. Mrs. Usman was assigned in the Trimming Department with a limited skill in sewing. However, there were times that she is being pulled out and utilized in other department should there be lack of workers during rush production which led to the enhancement of her skills in sewing.

As fate would have it, the factory closed down and all they have got from six years of loyal service was a meager amount of severance pay. The import business of the garments factory succumbed to the extremely cheap production costs of China. Enterprising by heart, and out of job, the couple used their separation pay to start a small tailoring shop. This enabled them to have income while staying at home to manage their household.

Her nameless shop, referred to by her loyal clientele and friends simply as Patahian ni Aling Liza(Tailoring Shop of Aling Liza), is now a decade old and has become bigger in terms of regular customers. She is now a regular supplier of bags, backpacks and belts to one of the biggest malls in the Philippines and other markets in Pampanga. But the road to this undertaking had not been a bed of roses for her, especially in the matter of loans.

“I have loaned with another lenders before but they exacted a very high interest rate especially when the pay-back term was long. For 36 months, the amount of interest was over half the amount of the principal,”Aling Liza shared.

Nevertheless, she needed fresh capital to infuse into her burgeoning business. Seeing the promise of good business, Aling Liza decided to join the Pagasa Philippines Lending Company in Mexico Branchand now graduated to Small Business Loan to further supply the needed capital on her business. Neighbors are also glad whenever there are orders, since they too are given jobs from teens up to 72 years old as trimmers. She then creates and promotes income generating activity in the society.

“It’s a good thing Pagasa is now in our midst because their lending rates are not burdensome. What’s more, I can pay them on a weekly basis from my collections in my produced bags and belts and not worry anymore. Before I know it, everything’s paid up,” said Aling Liza, during her break time in the afternoon inside her shop.

From a lowly factory worker, Liza now enjoys not only fiscal independence but also more free time. On top of it, she is able to spend more time with her family and sew some bags on the side. In between tending her family’s needs, she finishes at least fifty bags per day with the support of her husband and three regular employees as trimmers and sewers.

“I decided to save my money now for the college education of my three children. It’s very difficult then when I was still a struggling employee especially when it rains. The drizzle causes painful muscle spasms when we get wet after a day-long work behind the machines. I’m glad that phase of my life belongs to the past,” she said, giving off a cheerful smile.

The couple is blessed with three children; Arvin 19 who is now on his 3rd year of Mechanical Engineering, Archie on his 4th year in high school and Arcel who is in grade 8.

Series of trainings for group leaders were conducted on 2012 facilitated by the Area Managers and Branch Staff that primarily aims to promote group building and solidarity among all

Group Leaders recite the pledge during the training and Development Officers were given time to discuss and share with group leaders their current situation on dealing with their respective group.

Certificate of Participation is handed over to the Group Leaders attended the training.
A Special Certificate is given for the Best Group with excellent and outstanding performance.

Eight (8) branches of the Corporation had been affected mainly by the typhoon- Iligan 1 & 2, Tandag, Cagayan de Oro 1 & 2, Nabunturan, Monkayo and Kapalong, and some areas in other branches.

The Management has approved the adjustment of amortization to all affected borrowers on December 2012.

A wrecked school in Cateel, a town that was devastated by the typhoon’s strong winds. The storm destroyed thousands of homes, and many families are now living in cramped, temporary accommodations. PAGASA Lending is not the owner of this picture.

A truck passes among dead coconut trees destroyed by Typhoon Bopha. The typhoon, which hit on December 4, has caused major damage to infrastructure and agriculture in the southern Philippines. PAGASA Lending is not the owner of this picture.

A woman looks for materials as she helps her husband rebuild their house in Cateel. PAGASA Lending is not the owner of this picture.

Children line up on the road to beg after the typhoon left them homeless. PAGASA Lending is not the owner of this picture.

Giant waves and flashfloods caused by the typhoon extirpated concrete tombs in Cateel. PAGASA Lending is not the owner of this picture.

•  Flood in Mindanao– Mindanao Region has yet to recover from the devastation of Typhoon Pablo on December 2012 which killed hundreds of people and leaves more than 50,000 families homeless.

Sometime on January 2013, people of Mindanao experienced another devastation of nature through flooding and landslide affecting the borrowers of the Corporation in several branches.

• Fire Razed at Cainta- On January 17, 2013 a fire broke out in a residential area at Cainta that razed some 200 residential houses.

About six (6) groups of Pasig Rosario Branch are located in the affected area which borrowers/members’ houses and businesses were burned and now temporarily staying at health center and covered court.

With this incident a one- month moratorium of amortization is given to all affected members.

The country ranked 4th out of 55 in the Economist Intelligence Unit’s “Global Microscope on the Microfinance Business Environment 2012,” jumping two places from ranking 6th last year.

This, as it highlighted significant changes which are seen to promote the development of an enabling microfinance environment.

These include central bank Circular No. 744, which redefined microfinance loans to include amounts up to P300,000 from the previous P150,000.

Also noted was the House approval of a draft law which allow foreign ownership of up to 40 percent in rural banks.

The country’s score improved by 4.8 points to 63.3 index points calculated based on its performance in regulatory framework and supporting institutional framework.

The Philippines was one of only three Asia countries in the top 10 of the report, which covers a year’s period to June 2012.

This year’s overall ranking was topped by Peru, Bolivia and Pakistan. Below the Philippines, meanwhile, were Kenya, El Salvador, Colombia, Cambodia, Mexico and Panama.

In terms of regulatory framework, the Philippines shared the top spot with Peru, scoring 80 points.

“The Bangko Sentral ng Pilipinas (BSP, the central bank) continues to promote an enabling environment for microfinance, seeing it as one of its key poverty reduction efforts,” the report said.

A number of public sector institutions meanwhile provide wholesale funds to support the sector’s growth, it added.

Although improving by five points, the Philippines posted a slightly weaker performance, scoring 50 and sharing the 15th place with Brazil, Nicaragua and Uruguay.

“The industry remains relatively fragmented, as there is no one dominant institutional type, set of institutions, or network and multiple regulatory and supervision regimes owing to the diversity of the types of service providers,” the report said.

The country’s weak showing in this indicator may also attributed to a low “stability” score, particularly in terms of “political stability.”

http://ph.news.yahoo.com/ph-among-top-countries-in-microfinance–says-study.html

Posted on 10/17/2012 11:30 AM  | Updated 10/17/2012 1:51 PM

MANILA, Philippines – Only 3 million poor Filipinos or those living under $1.25 per day had access to microfinance loans in the Philippines in 2010, according to a study released by the Asian Development Bank (ADB) on Tuesday, October 17.

In a report titled Microfinance Development Strategy 2000: Sector Performance and Client Welfare, the ADB’s Independent Evaluation Department said this means that the penetration rate of microfinance loans among the poor was only at 14%.

Measured against a total population of 94.1 million in the Philippines, this means microfinance loans only reached 3.2% of Filipinos.

The ADB said while this already showed an improvement in microfinance penetration in the country, the microfinance penetration rate among the poor was significantly lower than Vietnam’s and Cambodia’s 75% and 32%, respectively.

According to the study, microfinance loans in Vietnam covered 8.5 million or 9.8% of its total population of 86.5 million as of 2010. In Cambodia, the ADB said there were 1.3 million covered by these loans or 9.1% of its total population of 14.3 million.

Penetration rates compare active borrowers against a potential client base of the population living below the international poverty line of $1.25 per day, the ADB said. Despite the growth in outreach and microfinance providers in Cambodia and Philippines, penetration rates were only 32% and 14%, respectively.

POOR ACCESS. The table shows how many poor people have access to microfinance in 6 countries. The image was obtained from the report.

Microfinance loans aplenty

The low penetration rate of microfinance loans in the country contrary to their availability. The study stated that the Philippines actually had a total of 14,935 microfinance providers, higher than in most countries. This was largely due to the high number of cooperatives that offer microfinance loans.

Further, the ADB said the Philippines was the second-largest recipient among 6 countries that received microfinance assistance from the ADB, accounting for a share of 19%.

Funds extended to the Philippines by ADB reached $173 million, of which $150 million was a sector development program loan approved in 2005.

During the 2000 to 2010 period, ADB support to 6 countries, including the Philippines, amounted to $916 million or nearly 33% of ADB’s total microfinance portfolio.

Program and sector development loans comprised the largest amount among the modalities of assistance at $660 million, while grants and Technical Assistance operations were the smallest at $18 million.

Microfinance has been mainstreamed in the banking sector and is supervised by the central bank. In the Economist Intelligence Unit 2011, of 55 surveyed countries globally, Pakistan and Philippines both ranked first and Cambodia third in the category of regulatory framework and practices, and they were 5th, 17th, and 25th, respectively, in terms of the supporting institutional framework. This suggests strong regulatory regimes and good prospects for microfinance in these countries, the ADB said.

Regional trend

In a statement, ADB said the penetration of microfinance among the poor in Asia and the Pacific remains low. As of the end of 2010, only 20% of the population living below the poverty level of $1.25 per day had direct access to microfinance services in 21 developing countries receiving ADB microfinance support. This level was below ADB’s goal.

Microfinance is seen in the region as an important means to helping low-income households take advantage of economic opportunities and improve living standards.

Despite the increasing popularity of microfinance in recent years, expanding the access of poor households to institutional financial services remains a great challenge to governments and development agencies, ADB’s Director General of Independent Evaluation, Vinod Thomas said in a statement.

MICROFINANCE LOANS. The chart shows the performance of ADB’s microfinance lending between 2000 and 2010. The image was obtained from the report.

The study said that for microfinance to have a greater impact on reducing poverty in the region, it needs to better target the poor and focus more on educating them in using basic financial services. Effective linking of microfinance services to complementary pro-poor interventions is also urged.

ADB said around 2.7 billion people worldwide or 70% of the adult population in the world’s developing countries, have no access to formal financial services, such as savings or checking accounts. They represent a key and still largely untapped market segment for financial inclusion.  Rappler.com

source: http://www.rappler.com/business/14331-only-3-m-poor-pinoys-have-access-to-microfinance-adb

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