PEP talk

Last August, the Rural Bank of Silang, Inc. began pilot testing a microfinance initiative in several municipalities in Cavite. The bank has initially allocated P20 million for microfinance lending, aiming to replicate the success of a similar activity implemented by two other rural banks, Producers Bank of Nueva Ecija and Marble Bank of Romblon.

At the same time, RBSI president Antonio Poblete pushed the Poverty Eradication Program, which seeks to establish a P5-billion financing facility reserved for microfinance lending, before the Confederation of Southern Tagalog Region Rural Banks

Under PEP, 100 rural bank-members under the regional association may pool their real and other properties owned or acquired (ROPOA) and liquefy these up to 50% of their appraised value. The move would have easily made available up to P50 million per rural bank.

"Our goal is poverty eradication, not just poverty alleviation," Poblete said. "We want to create job givers, not job seekers. And we, the rural banks, will provide them the additional capital to expand or diversify their small businesses."

Targetting women

PEP specifically targets women borrowers because studies have shown that women are more frugal, more conscientious and more prudent in their spending.

"We want to empower women, transform them from plain homemakers into real entrepreneurs. We will do this by teaching them financial intelligence and financial integrity which will lead to financial independence," said Poblete.

Borrowers are required to undergo value formation and business training seminars to equip them with basic know-how like bookkeeping, time management, making simple business plans. More important, the seminars will inculcate in participants the mentality and right attitudes of millionaires or entrepreneurs."

RBSI is organizing the Institute of Microfinance to formalize the offering of short courses helpful for small businesses as well as to prepare rural bank personnel for microfinance work. Rural bank personnel need four days of teach-in training and one month on-the-job training to operate a microfinance facility.

Interest

"Even women organizations in areas not covered by our pilot phase are inquiring on how they can participate," said RBSI assistant to the president Zandro Poblete.

Loans for first-time borrowers range from P2,000 to P5,000, to be used as additional working capital for existing businesses. The term is fixed for six months at an interest rate of 3% a month. Although a peer guarantee is required, the interest rate competes well with traditional sources of credit that require no collateral.

In addition, women borrowers become members of the Microfinance Club, which gives cash rebates from accredited establishments, insurance services, medical or health benefits and pension plans to members.

In the countryside, where rural banks operate, women have been contributing to the family income by engaging in small home-based businesses such as sari-sari stores, food-making, handicrafts, caring for livestock and canteen operations.

The Pobletes hope PEP will be adopted as a core project by all rural banks to empower enterprising women and uplift their lives.