Microfinance

What Do I Think of Microfinance? Pt. 1

This is part one of a two-part post on microfinance. Through Kiva and Negros Women for Tomorrow Foundation, microfinance became my entrée into this world.  I knew very little about microfinance prior to finding Kiva, other than what I had seen on an episode of Frontline highlighting the company’s early Read more…

Microfinance

What I Do: Borrower Interviews

As a Kiva Fellow, I go to the field to interview borrowers about the status of their loan and talk about the business, the family, and their dreams for the future.  Usually I do a short write-up to update the Kiva lenders, but sometimes I go overboard and write an essay.  This is not representative of most journal entries, but I found her to be such an interesting client that I wanted to share it.  I titled this journal update "Glenda's Business and the Economics of a Half-Hectare Farm."  It only went out to 13 people, so I'm hoping for a larger audience here*: (more…)

Microfinance

Branch Rollout in Cebu

[caption id="attachment_610" align="alignright" width="300" caption="The ubiquitous "Principles of Dungganon" sign."][/caption] This weekend I went to Cebu, an island east of Negros, for the Kiva rollout in the NWTF branches.  I traveled as part of a five-person team, including Massah, the photography consultant, Raymond, the research manager, Jubert, the IT manager, and Presy, the Kiva coordinator.  Pocholo, a friend of Raymond’s, needed a lift to Cebu and caught a ride with us.  The six of us loaded the infamous red van and left at 7 AM on Thursday morning.  The road to the port in San Carlos normally takes 3.5 hours, but we chose to take a shortcut through the mountains on a winding two-lane road cut neatly into the side of a cliff.  Unfortunately, by the time we arrived at the port, the ferry was full.  The next ferry didn’t leave until 2:30 in the afternoon, so we drove three hours south along a coastal road to another port in Aclan, where the ferry leaves every hour and takes 30 minutes to cross.  Once on the other side, we had another three-hour trip back up north.  Twelve hours later, we arrived in Cebu City and checked into a hotel. [caption id="attachment_637" align="aligncenter" width="300" caption="Our route, highlighted by the black arrows"][/caption] (more…)

Microfinance

25 Years and Counting

In August of this year, Negros Women For Tomorrow celebrated its 25th anniversary.  The organization commemorated the occasion with an extravagant party titled "Handum" (Dream) with 6,000 attendees, including staff, borrowers, partners, and a pre-recorded message from the godfather of microfinance himself, Muhammad Yunus.  Yunus catapulted microfinance into the mainstream in 2005 when he won the Nobel Peace Prize for his work with Grameen Bank in Bangladesh.  Naturally, most people (including myself until a few months ago) think that it is a fresh, new approach to economic development and poverty alleviation.  At 25 years old, however, NWTF is hardly fresh or new. As a means of immortalizing the 25-year anniversary, the organization created a book of 25 of the most inspiring stories from its borrowers.  In this blog, I've tried to lay out the history and mission of the organization to frame or provide context for other stories.  The foreword to the book, written by the founder of the organization Dr. Cecilia del Castillo, offers a much clearer description of the organization.  I quote it in its entirety here: (more…)

Microfinance

Grameen Bank Replication and the Principles of Microfinance

For a brief overview of the GBR (Grameen Bank Replication) methodology and its use by NWTF/Project Dungganon, see here.

Microfinance institutions (MFIs) are often affiliated with larger networks, which help to secure funding, offer back-office services, and provide an operations model.  These organizations - Grameen Foundation, FINCA, Accion International, and World Vision, to name a few - partner with MFIs across the world to replicate the model, be it village banking, the Grameen model, or another.  These networks span countries and continents, and operate as umbrella organizations for the global microfinance community. [caption id="attachment_76" align="alignright" width="176" caption="NWTF founder Cecilia del Castillo with Muhammad Yunus."][/caption] Negros Women for Tomorrow Foundation (NWTF) is affiliated with Grameen Bank.  Its founder, president, and CEO, Dr. Cecilia del Castillo, received her doctorate in psychology in the United States before returning to the Philippines to create an NGO that would serve women in her native island of Negros Occidental.  A meeting with Muhammad Yunus convinced her to found NWTF in 1984, with the goal to "help women achieve self-sufficiency and self-reliance, particularly in Negros Occidental’s low-income and depressed urban and rural communities." In 1989, NWTF introduced Project Dungganon ("honorable") and Dungganon Bank Inc., NWTF's traditional microcredit lending program, which most people associate with microfinance.  (In reality, microfinance describes a much larger suite of financial services, including savings accounts, insurance, and rural energy delivery, capital equipment assistance, and personal loans, but that is for another post). (more…)

Microfinance

The Galvez Family, Pt. 1

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. [caption id="attachment_38" align="aligncenter" width="300" caption="The Galvez family around the dinner table"][/caption] 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. (more…)

Microfinance

In The Field

[caption id="attachment_16" align="alignleft" width="240" caption="The road to a borrowers home"][/caption] I spent the last three days in "the field," a term used to describe the front lines of microfinance where the money is distributed to the clients of the banks.  Beginning early Tuesday morning, I set out for the town of Valladolid, a rural municipality about 50 km from Bacolod City.  The road snakes along the coast through increasingly less urban communities, until reaching Pontevedra, where the NWTF (Negros Women for Tomorrow Foundation) Valladolid branch is located.  Linda, the branch manager and former loan officer, took me to see the first of 15  borrowers we would try to track down over the course of the three-day trip (with a 67% success rate).  Riding in the metal grates on the back of a tricycle, where I'd spend most of my trip, we rode to small village called a barangay to interview several women about their business and loan.  The community here is small, and stopping for directions usually produced a guide that brought us directly to the home of the borrower.  Home constructions vary from 2-3 room bamboo nipa huts, to shanties with roofs of corrugated aluminum and floors of dirt, to cement frames with electricity, running water, and decorations on the walls.  Over the course of the week, I'd see all types represented.  Housing loans are popular among borrowers, and many homes have been built with loans from NWTF. (more…)