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As a part of worldwide MicroStart
program in the Philippines UNDP-MSP launched a 6-month Preparatory
Assistance Phase in September 1998. Prior to it, the total outreach of MFIs
operating in the Philippines was so insignificant that most of the
underprivileged people remained out of the microcredit umbrella. As a
result, the vicious circle of poverty remains intact in spite of taking
various steps by the government. In fact, for lack of sufficient resources
of the poor to fight against poverty, poor remain susceptible to poverty. In
this backdrop, the expansion of microcredit outreach has been one of the
imperatives in the Philippines. In the beginning of MicroStart in the
Philippines, the total capacity of MFIs could cover only 500,000. At least 5
million families were living below the poverty line. In this perspective,
the Philippines required an overwhelming operation of microcredit, which
could play a catalystic role in improving poverty situation and surmounting
poverty line.
Virtually
MicroStart in the Philippines is a tripartiate program involving UNDP, PCFC
and ASA, which represent respectively donor agency, governmental counterpart
of the Philippines and technical assistance provider. In the beginning ASA
involved three different local sectors naming NGO, co-operative and rural
bank and selected 14 local partners out of them. After getting
the preparatory assistance phase finished, ASA launched its next phase in
June 1999, which involves a three-year implementation program. As a part of
this phase, ASA imparted training to 150 management and field level people
of 14 local partners, exposing the operational techniques and prospects of
microfinance, which made them well groomed for microfinance operation, Under
the close supervision of ASA consultant, a real journey was embarked on in
August 1999 through adopting necessary arrangements of loaning and savings.
In the first four months of its
inception of operation, 5,060 out of 6,278 savers borrowed P18.5 million.
The rate of recovery of the mentioned period was 100%. Thus, ASA carried on
the process of delivering technical assistance with a purpose of creating
sustainable MFIs within initially stipulated three-year period. By the end
of December 2000, MSP has completed one and a half-year of its operational
journey. In the first year period, emphasis was given on Pilot Program to
acquire knowledge regarding how to exercise and transplant ASA's model.
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After the
completion of one year, the process is going on to integrate the pilot
projects in the mainstream and adopting best practice and strategic changes.
According to
earlier report, the expansion of outreach was not at all satisfactory
because of loan crises and termination of the membership of end
beneficiaries. Report of December 2000 presents another feature that almost
80% of target of outreach expansion of pilot branches. The savings
accumulation is 90% of baseline. Current loan disbursement or investment is
117% of baseline. Notably, these quantitative reports of performance include
the performance of only pilot operations.
In comparison
with COOP and Rural Bank, NGO enjoys the highest degree of outreach
expansion. Although, COOP suffers from on-lending fund and difficulty from
democratic decision making process. But for lack of loan the NGO faces
setback. Otherwise, it could have shown more growth rate. The growth of CBU
facilities in RB is the highest among all.
In loan
facility, NGO reflects the highest growth possessing 161% as against 157% of
Rural Bank and 65% of COOP. In statistical report, it is clear that NGO
sector is the most promising compared with others to extend CBU and loan
facility to the end beneficiaries.
In respect of
financial and operational viability, report says, 8 partners are financially
viable but others are operationally viable. Rural Bank is efficient in terms
of viability.
Unlike the
other cluster, profitability is not primary concern for NGO. Those partner
which seemed to be dieting as per earlier report within one year period
achieved financial viability.
Massive
expansion for MSP seems to be unrealistic due to scarcity of fund. Even some
partners are trying to survive amidst serious liquidity crisis. In spite of
such situation, at least five partners namely CCT, SCFI, NORFIL, Miladee,
WIFE are advancing steadily. Although pilot projects have already been parts
of mainstream and it is going to have an institutional shape, the future of
MSP is overcast by the shortage of fund.
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