Success in microfinance is difficult to measure because progress occurs incrementally and may take a generation or more to manifest. Usually, the benefits of microfinance – improvements in healthcare, education, and quality of life – are only visible over a longer timeframe. For industry practitioners and evangelists, the tangible success stories among recipients of microloans are valuable proof of its efficacy. On a recent trip to Valladolid, I was fortunate enough to meet one of the most successful NWTF clients in the foundation’s 25-year history.
The visit to the Galvez family farm was the last stop on a three-day trek through Pontevedra and the surrounding communities. The borrowers I’d met previously mostly operate small businesses that are reliant – directly or indirectly – on the rice- and sugar-farming industries that dominates the region. Homes are modest in size, made from bamboo, aluminum and concrete, with few rooms and, more often than not, earthen floors. And of course, like 80% of NWTF’s clientele, the women live below the poverty line. The Galvez family – Milagros, the matriarch, Lorito, her husband, and their three children, Lawrence, Lori, and Lori Mae – once lived a similar life, until a loan from Project Dungganon (NWTF’s microcredit loan program) allowed them to grow their small sari-sari store into an empire. Eight years ago, the family lived in a house made of bamboo. With the profits of their many businesses, the Galvez’ were able to upgrade to something better.
The Galvez home is in a gated compound. The driveway is flanked on both sides by two buildings – the Galvez family home on the left, and a combination aluminum garage and small warehouse on the right. Two identical dump trucks are parked in the garage. To the right of the main house is a piggery (a structure with pens for raising pigs) with only a dozen or so pigs are here, as the Galvez family has cut back this business to focus on their farming. Inside the house, a set of ornamental vases adorned with Egyptian art are displayed in the corner, and an entertainment system is playing music when we arrive. Many of the things we take for granted in the West have been hard-won by the Galvez family, enabled by microfinance.
Milagros Galvez first applied for Project Dungganon 5-6 years ago. She started with a loan of 5,000 pesos (about $100), the maximum amount for a new client, to purchase inventory for her small sari-sari store. She progressed to increasingly higher loans, which, in 2004, she used to start a piggery. Starting with five sows, the business grew to 60 piglets, which the Galvez family fattened for sale at the market. With the profits from the two businesses and loans from Project Dungganon, the family rented a rice field of several hectares and bought the crops and fertilizer for planting.
The family began hiring members of the community to work the fields and operate the harvesting machinery they purchased with a special loan from the bank. Eventually, the yield from the land became too large to transport by tricycle, so the family bought a truck, and then another. With no place to store the growing volume of crops, they built a warehouse. The climate of the Philippines allows for year-long planting, without a need to lie fallow the land, a common practice in the States. Not content with simply growing and selling rice, corn, and other vegetables, the family expanded into wholesale distribution, buying and selling rice for sale across the Philippines. Milagros Galvez is in the process of paying back at loan of 150,000 pesos (about $3,000) from Project Dungganon. She is still part of a group, and still attends a center meeting every week to pay off the interest and principle. Unfortunately, she missed this week’s meeting, as she was just recently diagnosed with Type II diabetes, but plans on returning soon.
150,000 pesos is the maximum loan offered by Project Dungganon, but Mrs. Galvez will likely opt for a much higher loan of 500,000 pesos or more from Dungganon Bank, NWTF’s savings bank. With that loan, she plans on constructing an industrial rice mill, to process the rice, removing the husk and preparing it for distribution. Operating a rice mill will create more jobs for her community and generate even more income for the family.