Philippines – Microfinance

Financial Services with a Human Face

As Ms. Never Balkido came up to receive her prize as best entrepreneur of the month she tearfully told her story to the assembled group leaders of Baba’s Foundation Incorporated (BFI) Micro-finance scheme. She started borrowing from BFI in 2004 with her initial loan of $US 83. She used the money to buy vegetables from her neighbors and sell them in the nearby market. Five years and 11 more rounds of borrowing and repayment later, Never was able to buy a small van to transport her ever expanding quantity of vegetables which she collects from many more neighbors in her neighborhood as well as from two others.


Ms. Elizabeth Cubero used her BFI loans to set up a successful bag making business.

BFI, one of AMURT’s oldest local partners is based in the Mindanao Island of the Philippines. It was founded in 1988. It shifted from its grant-sponsored social service activities (7 pre-schools, 16 consumer cooperatives, demo plots on sustainable agriculture) to microfinance in 2004 when donor grants became increasingly scarce in the competitive NGO field in southern Mindanao. “We realized that we had to find a way to make our organization more sustainable as grant money eventually diminishes and we were constantly forced to look for new grants. When the government amended laws to allow micro-finance services to be undertaken by NGO’s we decided to do our organizational makeover”, said Cristita Racosalem Epal, 48, BFI’s Executive Director who joined the institution 18 years ago.

Today BFI is a leader in the micro-finance field known for its innovative techniques that appeal to the real needs of the poor. Social services such as children’s advocacy, gender awareness, waste management and marketing linkages workshops still occupy 30% of BFI’s programs. Forty percent of the income from BFI’s microfinance activities go to support its social services which are largely self funded nowadays.

The majority of BFI’s 27 full time staff members tread the compound pathways and market places daily to encourage small scale entrepreneurs to join their program ,which offers attractive insurance schemes unavailable in the more traditional microfinance institutions. Its 3,000 card carrying members, by virtue of their 250 PHP ($5.20) enrollment fee, are entitled to additional benefits in case of death, wedding, sickness, fire, child delivery (almost all of BFI’s clients are women), even birthdays! “One woman who lost her leg through diabetes could claim money from BFI’s insurance scheme. She belongs to two other microfinance groups that do not offer insurance. That’s why our MWS (Member’s Welfare System) is the talk of the town. “Our popularity grows by word of mouth”, explains Ed Epal, 46, BFI’s Micro Finance Program Manager.

“BFI has a zero tolerance policy for loan repayment . . .  our repayment rate is 98%”

BFI offers loans to 7 different categories of income earners, but the most popular one is an informal cluster of 30 people, called a center. Each center will have 10 triads of 3 people each. The loanee must be guaranteed by her other two co-makers. BFI’s field officers collect money from their clients in the morning and visit defaulters in the afternoon. “BFI has a zero tolerance policy for loan repayment. Our officer will sit in a client’s house even past midnight if necessary until she or her co-makers pay up. With groups our repayment rate is 98%”, says Epal.

In five years the BFI has been able to establish 193 centers serviced by 5 branches in Davao City, Panabo, Butuan, Compostela Valley and Agusan Sur Province. Short term plans include opening three more branches this year, while long term objectives are to open a micro finance bank and start a Wellness Center. With the creativity, enthusiasm and managerial skills honed over 20 years of community work one gets the feeling that the only direction BFI can go is up!

Manila floods September 2009

AMURT Volunteers distrube meals in Manila after Cyclone Ketsana

Tropical storm Ketsana ripped through Philippines and left more than 250 people dead and close to half a million displaced.  Several provinces including the capital Manila received a month’s rainfall in a few hours which created severe flooding.

AMURT & AMURTEL volunteers responded within hours, serving hot meals and water as well as distributing clothes to thousands of affected people in various suburbs of Metro Manila.

Summary of service rendered from September 26-November 2, 2009:

– Served hot meals to 55,000 people.

– Distributed 12,000 litres of drinking water.

– Offered non-food items such as slippers, clothes, dry food, towels, toiletries etc. to 1,877 families.

– Offered Medical Service to 333 people

– Ongoing “Healing Art” programs with 87 children.