Monday, 11 June 2012

Low-cost capital for poor LaPIMa members eyed

The branch of CARD Bank, Inc in Daet, CamNorte ... providing cheap capital for the marginalized Filipinos. - MWBuzzpic by ALFREDO P HERNANDEZ

Editor, MWBuzz

THE LaPIMa (Laking PIM Ako) is looking at bringing to Jose Panganiban a unique lending program hoped to boost the earning capacity of many less-privileged and marginalized individuals and families in the municipality.

The lending program offers capital at low interest rates to qualified individuals who wish to start a livelihood project.

This lending scheme is right now being run across the Philippines by a non-governmental organization (NGO) called CARD, or the Center for Agriculture and Rural Development, Inc.

These days, CARD has about 762,688 active clients comprising small entrepreneurs who were former jobless and non-earning individuals.

The lending scheme is being pitched to LaPIMa by banker Florentino (Jun) E Espana, Jr, who is currently the senior vice-president at the Home Development Mutual Fund (Pag-Ibig Fund).

Incidentally, Espana is one of the prominent members of LaPIMa who has been helping the organization plan its livelihood program for its less-privileged members and their families.

The leadership of LaPIMa, both overseas and in the Philippines, is open to Espana’s proposal as it needs a viable source of funding that could support and sustain its livelihood assistance program to the growing number of poor LaPIMa families, who opted to stay in Larap, Sta Milagrosa and Pag-asa for a hand-to-mouth existence.

The association has many members who make a living from doing odd jobs or engaging themselves in fishing, vending, marginal farming, gold-panning, charcoal-making and the like.

Espana told MWBuzz recently that the CARD scheme has been patterned from the Grameen lending program in Bangladesh, which helped hundred thousands of Bangladeshis rose above poverty by providing them a source of cheap capital for their own small-scale businesses.

Incidentally, CARD has an affiliate group called CARD Bank, which has a regional office in Daet, CamNorte, making it more attractive for LaPIMa to consider tapping the organization for possible funding, said Espana.

CARD Bank office is located just across the provincial capitol.

“CARD is well-staffed and has the expertise and technology to effectively carry out the program for the grassroots in Mambulao,” Espana said.

He said the credit program covers individuals who wished to engage in small business projects such as buy-and-sell, retailing, market stalls, food processing, food production and many more.

The point is, it has to be viable to operate and could make a return in a short period of time.

Espana said that the CARD scheme has been very successful in areas where it operated in the Philippines, with the “repayment rate at 99.44%”.

“But for one thing, it could be a long process to reach this end (the repayment rate) for Mambulaoans,” he said.

“The program has to be explained to target individuals in Mambulao thoroughly as this would involve reorientation of individual values that have been ingrained all their life, re-education and re-evaluation of their goals in life.

“In short, it is an overhaul of the individual’s personality that simply would redound to one basic thing – a responsibility towards himself, his family, his neighbors and the society.

Espana said the end goal is for them to make it realize that a debt (a capital loan in this case) is something that has to be repaid and that it should be done under an agreement.

“Admittedly, this is a long process that could take more than six months … or ever more than a year because the re-education process is the most difficult thing and time consuming.

“For all you know, many of those who joined could drop out along the way,” Espana said, explaining that the prospective capital beneficiaries have to attend series of workshops, seminars and certain re-education classes over a period of time.

“To many, this is a time-consuming and a waste of time for them … but to others, it is the opposite.

“But once the idea has been inculcated to each of the potential borrower-beneficiaries, we could say “everything is in the bag”.

“This was how the Grameen scheme worked in Bangladesh and this is how it works right here in the Philippines where CARD is running the scheme.”

To prove a point, Espana recalled an incident in a far-flung village where a group of CARD beneficiary-borrowers lived.

When the time came for a team of CARD collectors to visit the village to get the payment that fell due on that particular week, a storm came, causing flooding all over the place and swelling of the river nearby.

When the storm passed, the villager-borrowers waited on their side of the river bank for the CARD people to come for their payments.

However, the river current had remained violent, discouraging the debt collectors from coming. So, they decided to leave and head back home.

You know what happened next?

When the villagers saw the leaving CARD men, they immediately plunged into the river and swam across, their money intact in their pockets.

Said Espana: The villagers did not want to miss their payment on that day.

“This was the kind of re-education these villagers underwent and it is this mindset they acquired that is making sure the lending program will succeed.”

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