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VIENTIANE  2008: 

PHILIPPINES

Infusing New Ways into Time-Tested Practices:   An INTEGRATED APPROACH TO MICRO-FINANCE   PATAMABA-Region VI Experience

Maria S. Nebla
Coordinator,  PATAMABA Region 6

INTRODUCTION
Apart from organizing for representation  and advocacy,   women homeworkers also see  the need to have an enabling strategy  that will allow them to engage in cooperative ventures and participate in advocacy reforms within the community. The formation of group enterprises and cooperatives by PATAMABA women was aimed to address the need for alternative livelihood in lieu of the dwindling resources and lack of opportunities.  Social enterprise activities are not centrally motivated by profit, yet, are responsive to  women’s desire for economic empowerment where reciprocity, trust, mutual support and community involvement  reign.  In most cases,  PATAMABA women infuse local and indigenous practices and time-tested experiences into the system.  If done in a participatory manner, efforts can be more meaningful and a sense of ownership and belongingness will surely abound. 
There is a growing interest to adopt  the concept of  Solidarity Economy,  especially among those who are looking for alternatives to the current global economic system which has deepened the wedge between the haves and the have-nots, and further alienated those who are already marginalized.  Just recently (October 2007), the  Philippines was venue of the Asian Forum for Solidarity Economy Conference attended by foreign delegates from twenty six countries in Europe, Latin America, Africa and Asia. By way of promoting the concept to the Philippines, solidarity economy was believed to be one of the solutions to uplift the quality of life of Filipinos because it assures that each person will be benefited as it is people-oriented, unlike the present market economy which is centrally focused on profits.

Thus, the idea of a solidarity economy began to dawn on women homebased workers as a sensible strategy to pursue in the name of cooperative, non-capitalist development.  (www.zmag.org/carolase.htm).  The PATAMABA Region 6 Chapter formation of solidarity economy blends into the two categories of solidarity economy organizations:  as a Self-help organization wherein  members support each other in dealing with their problems as a practical form of solidarity; and as a Cooperative where aims include a commitment to solidarity in some form.  (en.wikipedia.org/wiki/Solidarity_economy)

The PATAMABA women also believe that “Solidarity economy is a strong tool of empowerment and social change that starts from the initiatives of responsible citizens that want to keep control of the way they are producing, consuming, saving, investing, exchanging. It is a model of community-based and locally-based people’s economy. It constructs a sustainable development from civil society taking State policies and resources only as complementary to their own actions and resources. It makes economy accountable with ethical standards.”   (www.zmag.org/carolase.htm) 

HERSTORY:  The PAMBANSANG KALIPUNAN NG MGA MANGGAGAWANG IMPORMAL SA PILIPINAS (PATAMABA) Region VI Chapter

With humble beginnings as a small village chapter in Sta. Barbara, Iloilo in 1992, PATAMABA membership quickly spread to 41 village chapters in 12 municipalities and in 4 provinces (Antique, Capiz, Iloilo and Negros Occidental) in the Western Visayas Region (Region VI).  Today, it has almost a thousand active members.  This owes much to the sincere commitment and disciplined example of active leaders and key officials, who were elected to manage the Region VI Chapter since its formation.  Under such effective leadership, PATAMABA also succeeded in building two multi-purpose cooperatives (one in Sta. Barbara, and the other in Carles, Iloilo). 

Because of PATAMABA’s good work, it was selected by the Technical Education and Skills Development Authority (TESDA) to implement the pilot project for community-based training for economic empowerment in Region VI.  Under this project,  members were trained in various forms of livelihood such as meat processing and peanut butter production, as well as shiatsu massage.  They were able to acquire some tools and equipment for this kind of livelihood project like freezers, meat grinders, kitchen utensils, etc.

International agencies and visitors from other countries come to observe what they are doing, deriving lessons and inspirations from them.

Organizational Structure

As a regional chapter in the Western Visayas,  PATAMABA Region VI is managed by fifteen active leaders who form the Regional Coordinating Council and Committee.  They elect officers from among themselves, who sit at various positions: 1) Regional Chairperson, 2) Chairperson for Organizing, 3) Chairperson for Education and Training, 4) Chairperson for Networking, 5) Chairperson for Project and Fund Raising, 6) Chairperson for Health and Social Protection, 7) Chairperson for Marketing, 8) Regional Council Secretary, 9) Regional Council Treasurer, 10) Regional Council Auditor, 11) Sectoral Representatives of Informal Sector -  A) Homebased Workers, B) Small Vendors, C) Small Transport Workers, D) Non-Corporate Construction Workers, and E) Small Service Workers – Village Health Workers, beauticians, laundry persons, etc.)   The regional council meets regularly on a quarterly basis to discuss, plan, implement, and evaluate programs and projects  in various areas within its jurisdiction. 

Maria Nebla, who is the National Coordinator for this chapter, also sits in the Municipal Council of Sta. Barbara as representative of all non-government organizations (NGOs).  PATAMABA now has an office in the Sta. Barbara Municipal Hall and was awarded a space where it can put up a regional center cum office.

 The Micro-Finance Program of PATAMABA Region VI

• Integrating Mutual Aid into the Micro-finance Program

The programs and services of PATAMABA Region VI  include livelihood loans, savings mobilization/capital build-up, skills training, awareness-raising (on gender issues and reproductive health), community organizing, entrepreneurship development, marketing assistance and emergency assistance (through their DAMAYAN—helping one another in times of crisis).  PATAMABA Region VI has a credit plus approach to micro-finance, combining lending with capacity building towards greater women’s participation and empowerment. 

The regional leadership of Iloilo has built on the tradition of mutual aid in case of death.  Many times in the past, they have been called upon to pass the hat in order to assist families of members who have died.  At first, it was only the officers who voluntarily contributed Php 5.00 a month in order to finance this need.  When the micro-finance program went on stream, they thought of a way of expanding their collection by enrolling the borrowers into the scheme.  So far, about 480 have joined in, contributing Php 2.50 every 15th and 30th of the month for a total amount of Php 5.00 a month.  The campaign for DAMAYAN membership is continuing among micro-finance groups (particularly in Antique) who are entering new lending cycles where social protection through burial assistance would already be integrated.  Through their DAMAYAN, PATAMABA Region VI keeps the following records: baseline data on clients (many of whom have been the subjects of a mapping research), bilingual application form and proposal (same for all PATAMABA/ILO Micro-Lending Program), bilingual business plan, promissory notes, records of loan releases, loan amortization schedules, repayment and collection, savings and capital build-up, and monthly reports. 

Most of the borrowers’ projects are in food processing (making molo balls, tocino, budbod sustansiya, etc.), services such as carinderia, consumer trading/marketing such as sari-sari store, and handicrafts.  Although these are mostly low-growth enterprises needing little capital, some borrowers already have the need and the capability to borrow more.  The borrowers are individual women, most of them are homebased workers and market vendors; some are village health workers.  Many of them are married, but there are also widows, solo parents, and live-in partners who have low level of formal education.  Few had gone to college and vocational schools without completing them.

The Regional Committee (composed of 15 all women) is in charge of policy-making for all programs, projects, and activities, including the micro-finance one.  There are three women in the Regional Committee who directly manage the micro-finance program: the Regional Coordinator, Project Coordinator, and Treasurer.  Each of them is receiving honoraria of Php 1,000 a month that goes for their transportation and meals during collection and project monitoring.  They monitor the various groups, receive and deposit collections (every 17th and 31st of the month), and keep the records of the program.  At the municipal level, the municipal coordinators and treasurers receive and remit the collections from the village level every 16th and 31st of the month.  At the village level, the village coordinators and treasurers collect and record the amounts collected every 15th and 30th of the month.  They are assisted by group leaders who do the collection in far-flung areas of the villages.  In any case, the provincial coordinator who is based in the municipality receives the collection and delivers it to the PATAMABA Regional Office located at the Municipal Hall of Sta. Barbara, Iloilo.  They also had a bookkeeper who book keeps financial transactions on a monthly basis and receives honoraria of Php 1,000 every month.  Collections for repayments are deposited by the Treasurer in a bank near their office. 

Before loans are released, borrowers are briefed on loan policies and procedures, loan forms and documents, and undergo values formation, skills training, and entrepreneurship development.  These training programs are held in the PATAMABA offices, in community village halls and other centers, as well as in the homes of members.  Many of them have undergone gender sensitivity training.  Loan sizes vary depending on the kind of business, and the position in the organization.  Officers with business experience or track record, whose products have ready markets, with good repayment record, and entrepreneurial skills can have an initial loan size of Php 5,000.  Interest is spread out and included in the regular amortization payment collected every two weeks by the PATAMABA treasurers and coordinators.  97 percent repayment rate was maintained where the village captains are the co-makers.

Every month, the Regional Committee leaders (any of the three in charge of the micro-lending program) visits each client to see if the loan was used for its intended purpose, to give advice on the client’s business, and to track changes in the client’s income/asset, base, as well as her role in the household and community.  They know that clients are alright if they see investments in assets and in home improvements, and if the latter have the ability to finance project expansion.  Beneficiaries of micro-finance program are into food processing, sari-sari stores, handicrafts, candle making and production of novelty items. 

PATAMABA Region VI now has a total capital fund of Php 1.4 million (as of October 2008).  The fund came from the Foundation for Sustainable Society Incorporated (FSSI) and PATAMABA Region VI savings.  The FSSI granted them Php 500,000 of which Php 50,000 was spent for capacity building of beneficiaries and key officers of the project in enterprise development and the remaining Php 450,000 as seed capital for micro-finance.  This is a recoverable grant contracted for three years to members/beneficiaries of the micro-finance program. The fund was granted to them in June 2006 (without interest) and will be returned back in 2009 to FSSI.  Almost 70 percent of the total amount was already paid back thus far. 

• Credit Discipline

There are times when some members/beneficiaries delay in their repayment schedule for  reasons beyond their control.  Discipline to delinquent borrowers imposed by the management team range from confiscation of  properties, personal belongings (such as cell phones), household appliances, and the like. This is done after meeting with the village chief/captain who acts as the witness and co-maker of the loan.  Village officials are informed about the operation of the micro-finance program. 

OUTPUTS, OUTCOMES, AND IMPACT ON HOMEBASED AND OTHER INFORMAL WORKERS

PATAMABA Region VI suffered a severe setback when the WEED Credit Project [which the members were able to access from the Department of Labor and Employment (DOLE)], floundered at the height of the financial crisis. Demoralization hit chapters which received loans but could not pay due to economic difficulties as well as the weaknesses of local leaders.  This experience did not faze the regional leadership, in fact, it led to a greater resolve to rise from failure and institute a micro-finance program that really works.  Towards this end, Maria, the regional coordinator, attended the ILO/DANIDA sponsored Training of Trainors (TOT) on business management ran by the PATAMABA National Council in August 2001.  She was instrumental in having a similar TOT held in Iloilo for Region VI participants afterwards.

In 2001, PATAMABA was chosen as a partner of the Technical Education and Skills Development Authority (TESDA) Region VI for its training cum production grant.  Instead of spending the portion of the grant meant for meals, PATAMABA members decided to just bring their own food packs and use the savings as a start-up fund for their regional micro-finance program.  The program started with Php 120,000 (about US$ 2264 that time) and the money was lent out to several groups, some of which are already on their sixth cycle. 

The experience thus far shows that the PATAMABA Region VI has the capacity to make a small fund grow and to use it well, Regional leaders have evolved a lending and collection scheme system based on regular monthly visits to every chapter.  PATAMABA client borrowers have also shown exemplary credit discipline and can absorb higher loans if given the opportunity. 

LINKAGES AND NETWORKS

PATAMABA Region VI is building partnership with various agencies (government and non-government) at the local, regional and national levels.  Among them are:

1. Technical Education and Skills Development Authority (TESDA) Regional Office 6

1. Availed training cum production through Community-Based Training for Enterprise Development (CBTED) for the provinces of Iloilo and Antique amounting to Php 670,000 including a seed capital of Php 120,000

1. Department of Labor and Employment (DOLE) Regional Office 6

1. Availed Php45,000 for skills training on handicraft for the working youth members
2. Partnering with SSS, PhilHealth and Red Cross in the campaign for social security and insurance

1. Department of Science and Technology (DOST) Regional Office 6

1. Availed Php 40,000 worth of tools and equipment for fish processing project in Carles, Iloilo.

1. Department of Trade and Industry (DTI) Regional Office 6

1. Capacity Building on Product Development (quality control)

1. Regional Development Council (RDC)

1. Representation in the Regional Development Council as a Social Development Committee member

1. National Anti-Poverty Commission (NAPC)

• Representation as member of the Workers in the Informal Sector Council
1. Local Government Units (LGUs)

• Representation as member in the Municipal Development Council and Local Special Bodies and the LGU Advisory Committee
• Collaborated with other sectors in organizing the Sta. Barbara Informal Sector Cooperative which has a total of 25 members wherein the Provincial Governor of the province of Iloilo has released the grant amount of Php 50,000 as seed capital for its re-lending program

• Private Institutions

The Foundation for Sustainable Society Inc. (FSSI)

1. Availed Php 500,000 (recoverable grant) of which Php 50,000 was spent for capacity building training on enterprise development (accounting for non-accountants and bookkeeping) and Php 450,000 as fund for the micro-finance (relending) program of 480 members/beneficiaries for their livelihood projects. 

The revolving fund from FSSI and the savings from micro-finance program amounting to Php1.4 million pesos were lent out to 480 beneficiaries with 2 percent interest per month. 

EXPLORING THE SOCIAL PROTECTION EXPERIENCES OF MEMBERS

A number of PATAMABA homeworkers are already members of the Social Security System (SSS) because of their previous work experience.  Many are members of PhilHealth through the indigent program (after screening by the Department of Social Welfare and Development or DSWD) and through the sponsorship by a congressman, who worked through a Foundation called the “Taus Puso Foundation”.  The contributions were paid for by the congressman and these were renewed yearly.  One PATAMABA Municipal Chapter was also a sentrong sigla municipality where free health services can be availed of by residents, including free medicines.  There is also a Women’s Crisis Center which deals with gender-based violence in the municipality. 

Within PATAMABA, there are informal mechanisms for mutual aid.  Whenever anyone dies in the community, members contribute spontaneously, even without a designated collector.  PATAMABA officers relate that they have a PALUWAGAN or monthly contribution and some goes to a DAMAYAN fund.

• Membership Campaigns for SSS, PhilHealth and Red Cross

Aside from the indigenous DAMAYAN scheme to assist the bereaved, PATAMABA Region VI also embarked on a serious campaign to enroll members in formal social protection schemes.  Orientation sessions for SSS, PhilHealth and Red Cross were conducted after networking with said agencies.  PATAMABA leaders were also able to negotiate with their representatives for more flexible conditions to attract and maintain membership.  Although the SSS generally recommends a contribution rate of Php 282.00 for self-employed, PATAMABA members were given the option to pay at a lower rate of Php 235.  Actually, PATAMABA was virtually although informally accredited as a collecting agent (regional leaders regularly visit the members twice a month but collections can also be done by the area leaders on a weekly basis if this is a lighter burden on the paying member), and charges P 240 in all per member of which Php 5.0 goes to PATAMABA general fund.  As a result of this initiative, 300 PATAMABA members have joined SSS.  So far, one has availed of a death benefit, and another has received compensation for disability when hit by a tricycle while vending.

As regards PhilHealth, more than 300 members/beneficiaries have enrolled; village health workers and village nutrition scholars have free access to PhilHealth, more than 100 members have enrolled through the indigent program of the local government units (LGUs), and 100 members through the auspices of their respective congressmen, although a few also entered as individually paying members who contribute Php 100.00 a month.  Interest in PhilHealth however waned when one member was hospitalized in a semi-private hospital and after four months, his bills (payments for which he already advanced) have not been reimbursed. 

The Red Cross accident insurance program has attracted more members, 360 have enrolled because payment is light on the pocket with only Php 35.00 a year, and there is an incentive for PATAMABA to collect since Php 5.00 is retained by the organization.  This arrangement was negotiated by PATAMABA leaders who met with Red Cross representatives in the area to request accreditation for membership recruitment among workers in the informal sector.

Members/beneficiaries of micro-finance program contribute to DAMAYAN the amount of P60 every six months.  As of now they have collected a total amount of P12,000 as social fund in times of member’s death.  But then it is not sufficient enough to service the needs of members/beneficiaries when death comes.  When a member dies or when members of her family die, the project gives the amount ranging from P500 – P1,000 as funeral contribution aside from personal contributions of individual members.

PROBLEMS, LESSONS LEARNED, AND CHALLENGES

Managing the micro-finance program for women home-based and other informal workers is not an easy task for grassroots leaders.  As women workers, they have to balance their time  to be able to attend to both productive and reproductive responsibilities.  Hence, they need all the support to access capacity building seminars specially in small enterprise management,  organizational development, lobbying and advocacy. 

While in the process of implementing the program, the group identified some issues,  concerns  and constraints, which may have direct or indirect effect on its operations:  a) some local government officials lack awareness on the issues of homebased  and other workers in the informal economy in the locality; b) insufficient budget to conduct regular monitoring in far flung areas; c) natural calamities such as floods and typhoons; d) increased monthly contribution imposed by SSS for social protection benefits; and e) emergency cases beyond control. 

For the scheme to be expanded and formalized, however, it should be able to afford paid staff.  This means adjusting the interest rates and/or service fees upwards to two percent (2%) a month or 24 percent a year to cover costs.  This also means increasing the lending fund to about a million pesos, which is of sufficient scale to justify the hiring of dedicated personnel.  One way is to place the micro-finance under the umbrella of the two existing cooperatives, and motivate the clients to contribute more if they are already members, and to provide membership shares if they are not yet members.  This way the lending fund will not only grow but client members will even be more eager to borrow and save as they will be getting dividends and patronage refunds.

The recent typhoon and floods that destroyed most of the properties of members in the region was one unforgettable experience.  Their homes and production centers, (their livelihood as well) were totally damaged. Raw materials for production were washed away by the floods leaving them nothing to work on. Unfortunately, lives were lost.  It was the first time for these women to experience such devastation.  Basic community services like electricity, water, infrastructures were down in the entire region. 

Through the collaboration and networking of PATAMABA Region VI with local agencies and local government units in the region immediate response of  government institutions to the needs of the members/beneficiaries was made possible. Local government units sent out emergency relief assistance to the affected sites.

Because of their long term organizational involvement and exposure to gender training and issues, most clients manifest empowerment within the home (husband and other male members of the family share housework and child care), within the organization, and within the community.  PATAMABA believes in an integrated approach to women’s empowerment, which combines strategies such as awareness raising, community organizing, capability building, accessing resources (credit, technology, markets, etc.), social protection, lobbying, advocacy, and networking.  PATAMABA Region VI has done much in terms of many of these strategies, but needs to upscale and formalize access to credit (in terms of its micro-finance program) towards sustainability and institutionalization.

The Chapter’s success in relation to Solidarity Economy can be attributed to several factors:  1)  Strong networking, lobbying and advocacy; 2)  Good relationship established among partners and stakeholders; 3)  Good credit record; 4)  Membership  & representation in Local Special Bodies; 5) Accreditation with government agencies; 6) Good implementers and effective M&E; 7) Dedicated and committed leaders and members; and 8)  Presence of PATAMABA Regional office in Sta. Barbara, Iloilo.