This study determined the impact of CARE Foundation’s micro-finance programs on its member-beneficiaries. The instrument used was as “self-rating” survey designed to draw out the perception of the member-beneficiaries on the impact of CARE’s programs and services to fourteen (14) important aspects of their socio-economic lives.
The study used a descriptive and narrative research design. Analysis and presentation of the results used an evaluation and assessment method mainly based on the averages of the responses of the respondents. Interpretation of the results was limited on the perspectives of the respondents who were member-beneficiaries of CARE.
The results of the study showed that the respondent member-beneficiaries believed there was a significant improvement in the socio-economic live of the respondents. Percentage share of “no” responses to the total responses was minimal. The results showed a 70-30 ratio for the improvement (YES) and no improvement at all (SAME) responses.
These findings led to the conclusion that CARE programs and services had a relatively significant impact on the lives of the CARE members in all fourteen (14) areas of concerns, notable of which were improvements in the quality of family life, family decision-making, social and spiritual lives, knowledge about family, self and business, dreams, personal happiness, education of the children and food on the table.
It is recommended that government and other agencies should provide an environment conducive to the success and expansion of microfinance in the country.
ABSTRACT
This study determined the impact of CARE Foundation’s micro-finance programs on its member-beneficiaries. The instrument used was as “self-rating” survey designed to draw out the perception of the member-beneficiaries on the impact of CARE’s programs and services to fourteen (14) important aspects of their socio-economic lives.
The study used a descriptive and narrative research design. Analysis and presentation of the results used an evaluation and assessment method mainly based on the averages of the responses of the respondents. Interpretation of the results was limited on the perspectives of the respondents who were member-beneficiaries of CARE.
The results of the study showed that the respondent member-beneficiaries believed there was a significant improvement in the socio-economic live of the respondents. Percentage share of “no” responses to the total responses was minimal. The results showed a 70-30 ratio for the improvement (YES) and no improvement at all (SAME) responses.
These findings led to the conclusion that CARE programs and services had a relatively significant impact on the lives of the CARE members in all fourteen (14) areas of concerns, notable of which were improvements in the quality of family life, family decision-making, social and spiritual lives, knowledge about family, self and business, dreams, personal happiness, education of the children and food on the table.
It is recommended that government and other agencies should provide an environment conducive to the success and expansion of microfinance in the country.
Background
Inspired by the success of micro-finance in other parts of the country, and motivated by a naturally philanthropic family tradition, the owners of the MUTI Group of Companies decided to establish a non-stock, non-profit corporation that will share to the poor the blessings of success in business, and thereby help the less fortunate in the community improve their standard of living.
Thus, in June 2011, CARE was registered with the Securities and Exchange Commission (SEC) as a non-stock, non-profit organization organized to assist low income Filipinos in their pursuit for education, culture, civic, physical and economic advancement towards becoming responsible members and assets of society. By August 2011, CARE was able to establish its Head Office and its first branch which spearheaded the work of recruitment and organizing CARE member.
Care Programs and Services
CARE carries its micro-finance program through the Group Model Loan. This model was designed based on the “Grameen” methodology (Grameen means village, rural, or countryside) which began its operations from a small research project in 1976 in Bangladesh by Professor Muhammad Yunus. The project was aimed at testing the hypothesis that if financial resources were made available to the poor, they could generate productive self-employment without external assistance.
The Grameen Bank Approach gives exclusive focus on the poorest of the poor. Borrowers are organized into small homogenous groups and granted special loans that are particularly suitable for the poor. The grant of loans is simultaneous with addressing the basic needs of the clientele. There is also an openness to expand loan portfolio to meet diverse development needs of the poor.
The CARE Group Loan Model targets the marginalized but economically active poor population, specifically women. It is a community-based lending methodology with memberships of 10 to 20 persons per batch to guarantee each other’s loans. The CARE Group selects its own members, forming a minimum of 3 to 4 batches in a group or maximum of 40 CARE Members per CARE group. Each batch elects a team leader. The team members attend a four-day group formation process.
The elected officers serve as the CARE Group Management Team. The Group Management Team helps facilitate proper coordination of projects, responsibilities and control. The Group Internal Policy is facilitated by the organization for the group to accept and own. It becomes part of the group’s culture and day-to-day management.
A maximum initial loan of PhP5,000.00 is granted to a new member. Loans are intended for income-generating activities only and disbursed by batches, to be repaid in 20 weeks (or 18 weeks in case of collection holiday). Loans have very low interest rates and a minimal loan-processing fees and a token amount to pay for a micro insurance premium or loan insurance. CARE Members are required to make an up-front deposit of 5% of the loan amount to a Capital Build-Up (CBU) account and make a mandatory weekly contribution of PhP50.00 to that account.
Loan and CBU payments are collected weekly, during CARE group meetings. CARE batches per group rotate responsibility in depositing directly after the meeting the collections to a bank designated by CARE. Each batch co-guarantees all loans and weekly payments as part of the mutual guarantee system. No collaterals are required in availing the loan services. In addition, the loan could be increased every loan cycle. On the fifth cycle onwards, the loan amount could be increased up to PhP25,000.00.
CARE members can obtain additional capital from the Capital Build-up. The Capital Build-Up is a savings mobilization scheme for the CARE Members which could help them acquire additional capital to finance their existing businesses or establish a new business venture in the case of the members who are retired from the program.
Mutual Guarantee is the heart of good repayment. Rather than requiring collateral, CARE Members take joint responsibility for one another’s loans. They make a commitment to cover the full loan repayment, even if certain CARE Members are unable or unwilling to pay their individual share. If full repayment is not made by the end of the loan cycle, even if it was the fault of only one delinquent member, the entire membership in a batch will no longer be eligible for a re-loan until full payment of the delinquent group member. For this purpose, all CARE Group Members are asked to sign a Batch Promissory Note before disbursement, committing themselves to the Mutual Guarantee.
Along with the Group Loan and Capital Build-Up savings, all clients aging up to 63 years old are required to enroll in the Micro-insurance program which is an add-on service given to the CARE members. However, clients above 63 years of age are no longer qualified; instead they could avail of the loan insurance, which is 1% of the initial loan amount.
CARE believes in the holistic approach in assisting the poor and believes that without true spiritual transformation, genuine transformation cannot take place. CARE’s Values Transformation Program was initiated to elicit awareness and active participation to facilitate transformation through health, social, political, environmental, and spiritual interventions.
In addition, CARE also provides Entrepreneurial Development Services (EDS) to its members. The EDS are non-financial services that aim to enhance business skills and increase market access of resource-poor entrepreneurs to improve their income generation and asset-building capacity. EDS are provided to clients in the areas of entrepreneurial skills development, networking & business linkage, business promotion & integration, market research, and product development.
Selection of CARE Members
Membership selection determines the success of the program. CARE targets women who are among the “economically active poor” in communities with high population densities and levels of microeconomic activity. To qualify, a prospective CARE member should be an economically active poor in her community and an unemployed but active female operating a micro-business. Only one in every household is allowed to become a CARE Member, and should be at least 18 years old and not more than 63 years old. They must be physically capable of handling an income generating activity and currently have a micro-business that provides daily or weekly income. Other qualifications include being a permanent resident of the area and of good moral character, and having the willingness and ability to make regular weekly loan payments. Applicants should have good credit standing, preferably with no outstanding loans with other credit organizations.
CARE Performance
After more than eight months of work, CARE was able to establish two (2) branches in Gen. Santos City, while a third branch in Koronadal City is being set up.
As of May 17, 2012, CARE already has 2,788 active members (with an aggregate of 575 resigned members) and 98 CARE Groups. The cumulative loans released of CARE amounts to PhP22,538,000.00 with a loans receivable (LR) of PhP11,401,600.00. Capital Build Up (CBU) of members currently amounts to PhP2,469,125. The amount of total loans collected is PhP13,940.880. The Portfolio at risk (PAR) rate is at 5.60% and collection efficiency is 94.40%.
CARE’s CBU–LR Ratio is 23.45% and micro-insurance contribution ratio is 13.18%. Thirty-eight percent (38%) of CARE’s loans disbursements came from the CARE Member’s CBU and Operations Daily Loan Collections, while the remaining 62% came from MUTI Cash Infusion.
Based on the aforementioned performance indicators, CARE is considered to be successful in its operations. It is shown that its endeavors can be monetarily beneficial to its members in terms of incomes and revenues. However, CARE’s articles of incorporation provides that “no part of the net income which the association may obtain as an incident to its operation shall be distributed as dividends to its members, trustees or officers, nor shall the same inure to the benefit of any of its members or any private persons.” Furthermore, “the Board of Trustees of the Foundation shall not receive any compensation. In case of dissolution, the assets of the Foundation shall be transferred to similar institutions or to the government pursuant to the provisions of the Corporation Code.” Therefore, all acquired incomes and revenues of the organization must be used to increase the financial resources to ensure that its services are continuously provided to its members. It must be noted however that salaries and benefits of employees, investments in the name of the Foundation, trainings and setting up other related services are not included in the prohibition.
It has been established that CARE had been able to achieve its primary goals in the short period that it has been operational. Yet, this is only half of the reality if CARE is to be known as a truly successful microfinance institution. The researcher perceives the need to know whether CARE’s programs have any significant impacts on its member-beneficiaries.
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- Citation du texte
- Pascual de la Cruz (Auteur), 2012, CFI’S Microfinance Program: A Self-Rated Assessment, Munich, GRIN Verlag, https://www.grin.com/document/202397
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