Example of PEF borrower: NCSD with its network of more than 150 NGOs nationwide

ONE of the recipients of a PEF loan is the National Council of Social Development (NCSD), a network of more than 150 NGOs working on different projects throughout the Philippines.

NCSD tied up with another NGO under its umbrella, the Center for Community Transformation (CCT) to carry out the micro-financing project. The CCT specializes in microfinancing. It has several offices nationwide.

Marian Opeña, the officer in charge of NCSD, said they don’t have the capability to go directly to the people to lend the money so they tapped the CCT to implement the project.

NCSD entered into a joint venture with CCT, on a 50-50 sharing of work and profits.

“CCT ishe one to implement the project. We gave them the money but we facilitated the loan from PEF. We’re the one talking to PEF but we get one of our members whose expertise is microlending—the CCT,” Opeña said.

NCSD’s projects are concentrated in the Camanava area—Caloocan, Mala-bon, Navotas, and Valenzuela

NCSD got a P6 million loan from PEF in 2005 through a memorandum of agreement. Together with the CCT, NCSD carried out the program from 2006 to 2008. The projects still continues at this time using the seed capital the NCSD accumulated on its own in three years.

Opena said that aside from the P6-million loan, they also received P5-million grant from PEF because of their good performance. PEF evaluated NCSD and because of CCT it was able to get the 91.1 percent of the total amount of the P6 million and have it converted into a grant of more than P5 million.

“This grant will become seed money for us. Because we ended the contract with CCT with that we will make a new arrangement with them,” she said.

CCT Lending system

Any member can borrow indefinitely, Opeña said, as long as they have good repayment records. A borrower can initially get P4,000, and if they perform well in repaying, they can borrow was much as P50,000. The P50,000-loan is usually at the level of family enterprise, not a single borrower.

In Caloocan the borrowers were members of a Christian fellowship organization It has 98-percent repayment because of a mechanism created by CCT to make repayment easier. Borrowers are organized into several groups, each usually composed of 15 individuals. They help each other in paying the loan amount. And if a member fails raising the necessary amount due for a certain period other members help.

Some members fail to repay because sometimes they encounter unexpected expenditures or emergencies in the family and used the money intended for the business. The repayment is weekly and CCT designated a collector to get the money from members.

“There are beneficiaries who stopped borrowing because they were able to put up a seed capital. Some of them when their children get married they are also given loans and also the relatives,” Opeña said.

The concept of organizing borrowers in groups came from CCT. The CCT is good in micro-financing and in fact it received an international award for micro financing. CCT also has offices throughout the country. And CCT also has a fund of its own, Opeña said.

CCT’s lending system also provides savings for borrowing members. For example, a member borrows P4,000-loan, in 15-day term he’s required to pay P300. But another P50 will go to his savings so the total due becomes P350.

Besides the savings members also get insurance cover.

CCT’s saving program is considered the best based on a research conducted among borrowers. Sometimes the lending system is ruined by some borrowers who have other loans from other entities. They take a loan from CCT to repay their loan with the other lenders. Opeña acknowledged it as a problem.

Money for OFWs

NCSD also had an innovative way of helping people through a program of lending money to individuals wanting to work abroad. Driving lessons for OFWs were also offered so that when the work abroad they have the skills.

Under the lending program, a borrower can get as high as P70,000 for his placement fees but Opeña said nobody has used the offer.

“I think people value their families. Why go abroad if you can make money here even a small amount. That’s the Filipino culture. If you can lend me P50,000 maybe I could use it to start a business here and there’s no need for me to leave my family.”

This is the reason why NCSD initiated training courses, like cell phone and computer repairing.

Capability building

But Opeña said that not preparing the loan recipients on how to properly manage the money they get from NSCD will doom the project so aside from the original P6-million loan given to them they requested for less than P4 million as a separate assistance intended for capability building.

“The total is P9.8 million. The P3.8 million was used for vocational skills training of Out of Sschool Youths. Aside from micro-finance we have training of OSYs and capability building,” she said.

While there’s capability building for OSYs their mothers were also given micro-finance training by the CCT. The NCSD also gave the mothers seminars on effective parenting.

NSCD also gave drug prevention, rights of the child and other semiars during day loans were released. the loans. Other borrowers who have children not in school were also given training on skills.

Among the training courses are automotive, computer and cell phone repair, and beauty care, all free given by PEF. NSCD provided the transport allowances, materials, registration fees for all the trainees. The 10-month program for the youth was in coordination with Tesda.

The entire project, implemented in three years, benefited 4,000 individuals not to mention other supports given to non-members who didn’t received the loan.

Asked how a borrower qualifies for the loan, Opeña said borrowers are recommended by area leaders. Sometimes some beneficiaries make the recommendations. After the initial process, applicants are subjected to thorough verification. CCT personnel personally visit them and they are also required to complete certain documentation.

The Camanava micro-financing is NCSD’s special project. Opeña explained that the real advocacy of NCSD is children’s welfare especially preventing child abuse.

“NCSD is a network of NGOs and peoples organization specifically working on children, special protection, all the disadvantage children, child labor sexual abuse and then indigenous children,” she said.

The organization’s biggest donor is Unicef aside from other local financiers like PEF. Opeña said they want more money so they duplicate the project in other areas.

NCSD started the program to make every family in its target area more financially stable. Once families have a better source of income the children also become more secure and get the proper care and education they need.

“Because even if you teach the mothers how to take care of their children if they don’t have livelihood its useless.

There’s a time in our experience that sometimes if they get a loan they will buy food that’s the time that they are not able to repay,” Opeña said.

She added that looking after the welfare of children need a holistic approach and that’s the reason NCSD came up with a micro financing program.

Aside from the micro-financing, NCSD also has educational assistance for younger children funded by the Unicef.

NCSD provides school supplies to pupils coming from the public schools and until now Opeña said they are active in carrying out the program.

First microfinance project

The project is the first microfinancing project for NCSD and Opeña said they want to replicate it in other areas because of its success. However she said PEF appears to be not willing to lend them money.

“It’s successful but I think they are not interested in giving us money again. If in case we do it again we plan Pasay.

Pasay City is the poorest, we have a lot of NGO in Pasay and they want it. Pasay, Las Pinas, we really need micro finance,” she said.

But PEF signified that it’s not interested in Metro Manila area and it wants similar projects done in the provinces. And if PEF doesn’t want it done in Metro Manila, Opeña said they can support similar project in the provinces and currently they are looking at doing it in Samar.

Samar is one of the poorest provinces in the Philippines.

It was NCSD who approach PEF for the funding for the project, Opeña said, adding they were able to repay the loan amount in three years.

The microfinancing project is still ongoing in Caloocan although NCSD and CCT weren’t able to cover the entire area. Malabon, Navotas, Valenzuela weren’t able to get allocations and Opena said it would be better if NCSD can get more funds so it can cover more areas.

Soliman not a recipient

Commenting on the alleged involvement of Secretary Soliman in the alleged anomalous PEACE bond offering, Opena said she didn’t believe the social welfare chief committed wrongdoings.

“Dinky wasn’t there when we got the money. It’s the PEF that released the money not the CODE NGO although PEF was organized because of the NGO network and NCSD is one of the networks of CODE NGO. Everybody benefited down to the people. In NCSD we haven’t got money they just pay our people, book keeper, people who monitor that’s all,” she said. “We haven’t received anything, not even small supplies. They didn’t give me any supervising fee.”

PEF has measures to prevent anomaly and misuse of money. PEF regularly organizes meetings and assemblies with NGOs. Every organization that receives money makes financial reports so there’s transparency.

Opena said she can attest how the PEF people do business, how they abide by the guidelines. PEF always monitors organizations receiving the loans, auditing them many times in the course of project implementation.

“They are very strict. In fact they are stricter than other funders like the United Nations Children Fund [Unicef]. At Unicef its OK they are more lax,” she said.

At PEF they ask about many things, attendance, official receipts, canvass etc. so Opena said she doesn’t believe there is any anomaly in the organization. In addition a borrower with bad record can’t get any grant from PEF.

But in the case of NCSD, Opena said they were given huge amount of grant because of its good performance.

PEF gave NCSD the grant last year after a thorough evaluation. The evaluation was so strict and rigorous according to Opena, conducting meetings many times with NCSD, CCT, and the beneficiaries. They went to the project site to ensure transparency. –Manila Times