Published on Page A25 of the December 1, 2006 issue of the Philippine Daily Inquirer
BY lending the urban poor of Metro Manila and other key areas money to run ventures such as the distribution of chicharon or the manufacture of cement stoves, a leading microfinance institution has long realized that marginalized entrepreneurs are good borrowers.
Celebrating its 25th anniversary this year, Tulay sa Pagunlad Inc. or TSPI, through micro loans, has provided livelihood to over 140,000 clients throughout the country. In turn, these clients have generated thousands of jobs. All told, the lives of over a million poor individuals have been positively impacted by the nongovernment organization.
Better yet, TSPI executive director Ruben de Lara points out that the loans that amount to an average of P8,000 are repaid 99 percent of the time. The figure is way above the repayment rates of the country's largest banks that lend out to more affluent individuals and organizations.
At the same time, the repayment rates of the top micro finance institutions in the country that cater to specific segments who live below the poverty line hover in the same level. Collectively, these micro finance nongovernment organizations, which have been influenced by the Grameen Bank model, are often held up as showcases of effective mediums of poverty alleviation throughout the globe.
Founded by Australian philanthropist David Bussau, TSPI has established its presence in Payatas, Taguig, Taytay and many other shantytowns in Metro Manila. Its success is primarily based on the organization of borrowers, mostly women, into groups called centers. Members of the same center, who number no less than 20, serve as guarantors for each other. When one is unable to pay, all the rest would also be unable to avail of the next loan.
Thus, center members are encouraged to look out for each other and to be collectively disciplined in paying back their loans.
According to De Lara, the centers also usually end up functioning as a support group for the women as they struggle to climb out of poverty by vending rice and the like. "Not only do they help each other meet their financial obligations, they are also likely to take care of each other's children and do favors for one another so that they can collectively succeed in their micro ventures."
Petite Violeta Sabote, a housewife in her late 20s and enterprising vendor of rice, biscuits and fish, said that TSPI brought hope to Barangay Muzon, Taytay, Rizal, when it established a center there some years ago. Before TSPI, loans for micro businesses could only be had from loan sharks that charged exorbitant rates.
According to her, regular banks could not be expected to lend the small amounts needed by micro entrepreneurs who had no collateral to offer.
A testimony to the transforming effect of the centers, Sabote relates the story of Center 13, to which she belongs. It was about to be shut down because of the 28 original members, 10 were no longer paying their weekly installments. The errant members lived in another area and were almost impossible to track down. Unless the remaining 18 could cover for the 10 delinquent members, no one in the group would qualify for further loans.
Center chief Mercedita Dacuta toyed with the idea of just letting things be. But a widow in the group pleaded that she needed TSPI's financial assistance because she had four children and six grandchildren to support. The feisty Mercedita, who is in her 30s and runs a convenience store, recalls: "Nung nagsalita ang balo, nagbago ang isip ko at nagdesisyon na labanan ang pagsara ng center. (When the widow spoke, I changed my mind and decided to fight to keep the center going.)"
The remaining Center 13 members took over the weekly payments of the delinquent members. They also found new recruits so they could meet the required minimum of 20 members per center. Today, the center has 24 active members and boasts a repayment record of 100 percent, an achievement enjoyed by many of the thousands of TSPI centers nationwide.
De Lara notes that TSPI targets communities where residents have often been reduced to "a state of hopelessness from not being able to have enough for basic needs." He observes that many of the marginalized literally work from sunrise to sunset but remain poor for lack of resources. The micro loans effectively stimulate the borrowers to come up with their own ventures as their means to escape poverty.
Moreover, as they succeed in their businesses, they usually become leaders in their communities as well. This was the experience of Flora Lebrilla, of Lower Bicutan, Taguig. The distributor of packed chicharon got into the business mainly to augment the income of husband Manuel, an electrician. Even when he was employed by a large manufacturing firm, there was simply not enough food for their 12 children.
The bashful Flora somehow found the courage to borrow P2,000 from TSPI in 1993 so she could begin distributing packed chicharon purchased in Baliuag, Bulacan, to vendors in Guadalupe, Makati and Alabang. As her business thrived, she expanded her network by tapping her neighbors. The business grew even more in 2004 when she expanded her product line to include marinated chicken with a P14,000 loan from TSPI. Once again, she asked neighbors to be her agents.
In her center and in her community, Lebrilla has a way of inspiring confidence in the future. While she remains self-effacing, there is no doubt that through her efforts, the benefits of micro financing has made welcome ripples in her neighborhood.
In her corner of Lower Bicutan, more families now have food on their table; more homes have been transformed from mere lean-tos to abodes with cement walls; and more now look to the future with optimism.
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