2014 NLDC Business Forum: Building Resilience among Micro Finance Institutions
Hotel Elizabeth, Baguio City, February 19-21, 2014
Heads and top management representatives of 26 NLDC-accredited micro finance institutions operating in Luzon attended this year's Micro Finance Business Forum organized by the National Livelihood Development Corporation, in partnership with Alalay sa Kaunlaran, Inc. (ASKI).
NLDC President Gondelina Amata delivered an opening message challenging the MFI participants to continue helping their clients in the countryside despite the negative environment. She pointed out that the not-so-favorable environment should not deter them from supporting and improving the lives of their clients.
Urging the participants to get out of their comfort zone, Pres. Amata mentioned that while it may be a lot easier to provide loans for commercial businesses because they are already established, the real challenge is providing credit to start-ups in their respective localities, having faith in these small entrepreneurs, and helping them improve their business operations. She invited them to make a great sacrifice of helping others and focus more not on the profits but in improving the lives of these entrepreneurs.
Mrs. Amata ended her message with the quote: "Most people ignore opportunities because they only see danger, but entrepreneurs ignore danger because they see only opportunity."
The 2015 ASEAN Integration: Cooperation or Competition?
Two resource persons shed light on the impending effects of the ASEAN integration on (a) agricultural products and or (b) human capital and the finance industry. Mr Noel de Luna, Head of the International Relations Division of the Department of Agriculture, emphasized how 2015 is extremely crucial as it is the reckoning date for ASEAN countries to lift, if not lower tariffs and import duties of goods, including agricultural products. The IRD Head added that sugar and rice will be seriously affected, and that other countries have already started preparing for this ASEAN Integration.
Mr. Carlo Asuncion, former DLSU professor, discussed how integration will affect the human capital and the finance industry. Professor Asuncion urged participants to treat the impending integration as a potential for cooperation rather than competition. He emphasized that the Philippines should strengthen the education sector to make the country competitive in terms of skills, competencies, and compensation. MFIs should explore partnerships with counterparts abroad for expansion purposes, and ready themselves for consolidation of other banks which may happen as a "bracing mechanism" in preparation for the opening up of markets.
Two program partners shared their experiences on programs and interventions which will prepare the organization for the ASEAN Integration. Ms. Jane Manucdoc, Head of Operations of ASKI elucidated on their experiences in implementing agricultural financing when they started the FEP together with NLDC. She gave a preview on the innovations done to accommodate the program, including the capacity building programs; reducing farmers' vulnerability; support to farmers equipment and infrastructure; market linkages and technical support or BDS. Although it was apparent that farming is very risky, ASKI still took the challenge of expanding agricultural finance and addressing gaps towards sustainable agriculture.
Nueva Segovia Consortium of Cooperatives' (NSCC) CEO, Ms. Divine Quemi, differentiated the roles of their cooperative, the LGU, and the farmers in the process of linking to institutional markets. At present, NSCC is involved in collective buying and selling of fertilizers, and the LGU has been very supportive in sharing in the expenses related to FEP. LGU's share covers the free training from the agriculture office, support and subsidy on some inputs and the involvement in the local planning for community development. The MFI's role, on the other hand, is focused on the financing aspect of the project including facilitation of the farmers' organization being the lead institution. Ms. Quemi ended her presentation by a very encouraging quote: "Alone we can do so little. together we can do so much."
A workshop on the topic yielded the following recommendations: MFIs must address the lack of financing window in the agriculture in the agricultural much as in the Value Chain Financing and offer programs that will address specific needs of farmers in the agricultural value chain. The needs of farmers cannot be broadly "lumped" or categorized under a "micro finance program" window. The main solution or step suggested was to create other loan program for their specific need.
Climate Change and Environmental Hazards
Mr. Alan C. Taule from the Department of Science and Technology updated program partners on DOST's actions regarding natural calamities our country has been experiencing. He noted that DOST and other groups have been working together to identify the areas in the Philippines that are susceptible to geohazards.
Ms. Estrella S. Andres, Vice President of ASHI or Ahon sa Hirap, Inc., showed a photo documentation emphasizing the gravity of storms and calamities that destroyed communities under ASHI. It's major action was to adopt a disaster management strategy called ATAC which means Awareness, Transfer, Accept, and Control, and by using this, they were able to mitigate or transfer the risks. Development Officers and the Branch Managers of ASHI were given roles in addressing disasters, and series of center meetings were done to re-establish the livelihood that were destroyed.
Dr. Praxedes Ignacio of Mallig Plains Rural Bank shared their financial risk management tool to mitigate the risk even before disasters occur. She mentioned that MFIs have to identify the branches of areas which are prone to specific disasters, and would have to conduct a portfolio review analysis coupled with on-site validations. She suggested that financing windows should be designed in a way that it can accommodate potential risks.
On a different note, Mr. JC Libiran, a Kerygma Motivational Speaker moved the audience with his energetic talk of biblical and practical quotations. He also made the participants ponder on their own Yolanda experience. In the end he asked all to bounce back from the challenges and crisis they encountered in their lives.
Looking Beyond Raising Funds: Strategic Approach to Resource Mobilization
Mr. Novel Bangsal, Director of the Congressional Policy and Budget Research Department in the House of Representatives shared the government's framework on fund generation and the budgetary process from which rural areas or local governments usually get funds. According to him, funds can be sourced from grants, gifts, or earned income. He emphasized that sustainable resource mobilization is a strategic process that is grounded on effective organizational management brought about by creative communication and maintained through nurturing stakeholders relationships.
Ms. Zoraida Libunao, ASKI Head of Resource Mobilization Department, shared ASKI's experiences in fund sourcing. She emphasized that as the organization expands, the need for money becomes imperative. The main step is to connect with the fund provider and maintain the relationship through communicating constantly, exhibiting creditworthiness, and being available during visits or the creditors or donors.
Special Topic: Ideas on Developing a Winning Proposal
Mr. Edel S. Garingan, Officer of the Philippine Foundation for the Environment, offered practical tips in writing a winning proposal as an entry point in resource mobilization. He explained the development process, namely; a) organizing a team, b) reviewing the requirements and forms, c) designing the project, d) writing the proposal, e) packaging and submission. In the writing stage, the officer must define clearly the concepts and strategies of the project, describe the processes and intended results, and demonstrate the capacity of the organization in implementing the project. He emphasized that what matters more for the funder is the clarity of the proposal and its timely submission. Lastly, there should be similarities between the funder and proponent's mission or objectives.
In closing, Mr. Jude Andrada of the AMDG-NLDC, presented program updates, brief reports and NLDC accomplishments. He urged the MFIs to cover areas which are not yet served and to devote portfolio on value chain finance for agriculture.