Grameen ‘micro-credit’ model already thriving in Pampanga

By Tonette Orejas
Inquirer

Posted date: October 22, 2006

“Utang ng isa, utang ng lahat (One’s debt is everybody’s debt),” was how she had come to understand the micro-credit program adopted from what Yunus began in Bangladesh in 1976.

The bias for poor borrowers also holds true here. “Loans go to us, poor women,” Agbunag said as she and 26 other women from the flood-prone village of San Nicolas in Minalin town received their group’s loan of P195,000 on Friday.

This was the seventh time since 2003 that they renewed their loan from the Talete Ning Panyulung Kapampangan Inc. (Bridge for the Progress of Kapampangan Inc.) under its Alternative Livelihood Opportunities for Women (Alow).

“It’s an adaptation of what Dr. Yunus has started,” said Fr. Ed Panlilio, who founded TPKI in 1987.

Adopted 10 years ago on the egging of the Alliance of Philippine Partners in Enterprise Development, the Grameen Bank model by TPKI has helped groups of women, with a total membership of 16,602, and 2,639 individual borrowers, mostly women, in Pampanga, Tarlac, Bulacan and Nueva Ecija, according to its records.

The loan portfolio since 1987 has amounted to P1 billion, with Alow taking the bulk of the fund. Loans from January to September 2006 have reached P154.4 million or an average of P17 million monthly.

Money borrowed ranges from P3,000 to P10,000, at a 2.5 percent interest monthly or a fourth of what usurers charge. Lent out for a six-month term, the amounts are paid weekly.

The repayment rate is 92 percent, said Noel Alipio, TPKI assistant executive director for operations. He said the TPKI can sustain itself now due to the P20 weekly capital build-up fund of members.

Gina Marin, director for administration and finance, said the TPKI has stopped borrowing capital from the People’s Credit Finance Corp. since 1998 and the Land Bank of the Philippines and Care Philippines both in 2002.

Members can withdraw the capital build-up fund when they assess themselves to be no longer dependent on loans or they want to meet emergency needs without spending the loans on these.

Clients are also covered by insurance in forms of cash or burial assistance worth P35,000.

It reaches more women through branches in Apalit, Guagua, Mabalacat and Sta. Ana towns in Pampanga; Baliuag town and Malolos City in Bulacan; and Capas town and Tarlac City in Tarlac.

The TPKI has grown from the P6,600 pooled from the contributions of the founding board comprised of Willie Vergara, Dandy Cabral, Frank Ignacio, Rev. Elias Talavera, lawyer Avelino Gorospe, Fer Caylao, Kits Lapid and Luisa Panlilio.

Its three-member staff has grown to 100. From the individual lending program, it has offered Alow and then housing loans to victims of Mt. Pinatubo ’s 1991 eruptions, by far the worst natural disaster that had hit Pampanga and other provinces of Central Luzon.

More than the good marks, it is what those loans do to the lives of the women and their families that matters most.

“Maragul yang saup (It gives big help). My husband was out of work for two straight years but we were able to survive through the P3,000 loan I took. What I earned from selling went to buying food and school supplies for the kids,” Agbunag, a mother of four, said.

When her husband found work in a bottling company, she set aside some earnings to use these on selling candles, meat products and beauty products. She preferred being self-employed as jobs for a college undergraduate like her came slim.
“You own your time and you can do more ventures,” she said.

Agbunag is relieved that she can get loans even if she does not have collateral to show. The loan is guaranteed at first by the group to which she belongs and then by borrower’s track record of paying on time. She has increased the loan to P5,000.

Rosie Carpio, 46, started her rice retail business with P5,000. “My husband’s income as a jeepney driver did not suffice. More than half of his income went to paying the boundary (payment to the jeep’s owner) so I needed to work to at least produce the rice for the family,” Carpio said.

As the family got a steady supply of rice for their meals, she also managed to set aside earnings for her son Ricardo’s fare to school.

Ricardo finished a civil engineering course last year and found work in government. He’s helping his parents send his younger siblings to school.

“These women are usually non-bankable clients but it is they that we chose to work with for the following reasons: They have a high sense of dignity, they carry much of the burden of raising their families and they’re easy to locate in their homes,” Alipio said.

“At this point, TPKI and its partners (the borrowers) are able to only ease poverty. We still haven’t totally eradicated it or help them bridge the poverty line,” he said, citing the gravity of poverty in rural areas.

Still, there is another aspect that grows in these micro-enterprise ventures. “The value of misaup-saup (helping each other) has been strengthened and they grow spiritually together. This is the spirit of ecumenism. We’ve got to have a holistic approach against poverty. It is not enough to have economic liberation,” Panlilio said.

The TPKI took roots when residents in poor communities being organized by the Archdiocese of San Fernando began airing the need to get loans to improve their lives. The first NGO it approached, the Tulay sa Pag-unlad Inc., suggested that it be done through the ecumenical way or reaching out to various Christian believers, not only Catholics. How diverse they can be is mirrored by the composition of its present board of directors. Four are Protestants, two are Catholics and one is a Born Again Christian.

Alipio said partners gather once a week to hold Bible studies, prayers, personality development and leadership training. Many did not only become entrepreneurs but also community leaders. Christopher Diaz, a project officer, said he has seen the “collective spirit” in action.

In many cases when members are unable to pay, their group mates motivate them to go trying and not to lose hope. When that fails, they assumed the debt, grudgingly of course, but still gives a second but not a third chance.

“In a group in San Simon, the women pooled P2,000 to contribute to a member whose husband died. Because their friend was tired from the wake and burial, they went out of their way to take turns doing the laundry for her,” Diaz, 31, said. “You see women bonding in times of need,” he said.