Investing in poor people

Much has been said about anti-poverty programs but for it to succeed, such programs should be anchored on the right foundation and must come from the heart.

Ernst & Young’s Woman Entrepreneur of the Year for 2006 Ruth Callanta believes in investing in poor people. "I believe in investing in poor people. The poor can pay for their own development. They don’t need to rely on subsidies and dole-outs to have a better life," Callanta said.

Callanta is president of CCT, a Christian organization that aims to uplift the lives of the poor. It was founded in 1992 with the vision of seeing Christ-centered faith communities where Jesus Christ is honored and worshipped and where people live in dignity and sufficiency in accordance with God’s plan for a just, humane and caring society.

Callanta explained it is not God’s will for people to remain in abject poverty. As such, CCT has established a holistic integrated approach to fight poverty. The approach included a micro-financing program, commodity trading, social services, education and last but not least, bible studies.

"The idea is to increase their income, reduce their cost of living, ensure social security, have an education and most of all for them to make the right decisions," Callanta said.

Increasing the income of those who are part of the program is possible by being a member of the CCT Credit Cooperative. Here, they can get loans through CCT’s micro financing ranging from P500 to P50,000.

Patterned after the Grameen Bank model on micro financing, the borrowers get small loans which they pay on a weekly basis. The interest rate is three percent monthly but members annually get a dividend and a partial refund on the interest they paid through their loans.

What is amazing about CCT micro financing is that the repayment rate is 98.5 percent. Moreover, it has not written off a single debt since it started micro finance operations in 1999. For 2005, CCT’s net income reached P9 million. Of these, P4 million were given back to the CCT Credit Cooperative members.

Callanta explained that much of the secret of CCT’s success is that they have structured their weekly meetings not only to discuss what happened to the businesses of the borrowers but also into prayer/bible studies. Through this, borrowers are introduced to the Bible and accept Jesus as Lord of their lives. This way, Callanta said their borrowers are given wisdom to make the right decisions both for their businesses and personal lives. In fact, the community partners or borrowers have reported income increases of about P10,000 monthly from their business loans.

Last year, CCT was able to loan out about P1 billion. For this year, P2 billion has been allotted for micro finance projects. Other loans available are for housing and education. CCT also facilitates social security services like insurance as this would otherwise be unavailable to the poor.

CCT also wants to reduce their cost of living. As such, it has tapped some companies to sell to them unbranded detergents and medicines at very low prices which they, in turn, sell to their members.

Today, CCT has helped about 100,000 families have better lives across the country. Callanta said that with God’s grace, they will continue to grow and serve those who need them most – the poorest of the poor.