My second day in the Philippines started quite early, especially since I was still slightly jet-lagged from my flight. My Philippino colleagues picked me up at the hotel at 6.30 in the morning to go to Oikocredit’s project partner Alalay sa Kaunlaran Sa Gitnang Luzon Inc. (ASKI). After a quick breakfast at the Philipino version of Delifrance we headed to Cabanatuan City, three hours drive North of Manila, where ASKI’s head office is located. During the trip, some of us were sleeping (but fortunately the driver was not) when we almost bumped into a bus. They say traffic is bad in Manila, and apparently in rural areas it can also be quite dangerous. When we arrived at the head office, we were briefly introduced to some ASKI staff. We were supposed to have a longer meeting after we went for a visit to a group ASKI works with in the province Nueva Ecija. After being on the road for another hour, the ASKI staff explained with enthusiasm what their organization is about. Not only are they focused on microfinance but they also have many social development activities. As we say, they offer microfinance plus-plus!
The ASKI group we visited started in 2005 and began with a strong focus on social development. Since 2006 an agricultural loan group was started and we met 10 members of this group (see photo).
Photo: Members of the agri-loan group of ASKI in Nueva Ecija
Paula Patoc is a lady who looks very young but told me that she already has a few grandchildren. Paula Patoc has been a client of ASKI for 12 years through its individual lending program. She has several very small businesses: a mini-gasoline station, prepaid phonecards distribution, beauty products (I wondered if that would be her beauty secret…), a water filling station and a mini-pharmacy. Now she has a six month loan of PHP 25,000 (EUR 433) which she uses for all her businesses.
Furthermore, she has a housing loan for home improvement of the same amount. Her husband is part of a group lending scheme. Paula is a community organizer who tries (together with the help of ASKI) to organize the community to get things done by the local government and solve the problems they have. They have pushed for water projects, toilets, a day care center, among other community development projects. It showed me that ASKI does not only provide access to financial services, but empowers its clients to stand up for themselves and lobby with the local government to solve their issues. I also found it interesting to see the difference between men and women in this respect. The men of the community were focused on getting the local government involved in an electricity project whereas the women had a strong lobby for a toilet project to help poor families get proper toilet facilities.
Photo: Paula Patoc in her house in front of her mini-pharmacy.
Another member of the group was Edgar, a rice farmer who already has his 11th loan with ASKI. When he started borrowing from ASKI he received a loan of only PHP 7,000 (EUR 118) and now he has a loan of PHP 45,000 (EUR 757). Edgar also saves with ASKI and part of this money he uses to pay off his loans. When I asked why he was with ASKI for so long he mentioned that ASKI has the lowest interest rate as other financing options would cost him 8 – 10% per month. He is using the loan for labour, inputs, etc for his rice production. He tried to produce in an organic way, but explained that it is difficult in this area, because it is mainly rain-fed rice production. As a result, weeds grow easily and it is very labour intensive to continuously weed the land. It would make organic production possible if they could have an irrigation facility, but it’s hard to get a group loan for that since some of the members of the group have land too far from the pump to make proper use of it. Luckily for me, Edgar’s plot of land was not far from where we met. Therefore he took me in his tricycle (see picture) to his land. Not completely fit for a tall European woman like me, but being a real Ugandan boda-boda fan, I really enjoyed the ride!
His rice field was not yet prepared for planting, but he hoped it would look like the neighbouring plots in a short time. He even offered me a hectare of land. I expected his sentence would continue with “if you marry my eldest son…” but he did not refer to anything like that. He just preferred hard dollars or euros for his plot. That sounds like an economist, which of course I liked!
Photo: Local transport in the Philippines
Later went back to the ASKI head office and met with the Executive Director (Mr. Rolando Victoria), the Director for ASKI Foundation (Ms Babylyn Dela Cruz) and the Director for Resource Mobilization (Ms Zoraida Libunao) who explained about the current positive developments in ASKI and their major difficulties. One of their problems is the PAR (portfolio at risk) level which is currently quite high. They have a lot of their loans in agriculture which is always a risky business, but especially in a typhoon prone country like the Philippines. Even though part of these loans have crop insurance it is difficult to get this because the insurance companies do not always pay out. On the other hand it strikes me that this organization wants to keep its focus on agriculture and is thinking about new products (value chain financing) and works together with e.g. Philrice, an institute for rice research.