Dr. Jaime Aristotle B. Alip
Founder and Managing Director, CARD MRI
January 29, 2009
Philippines-Australia Community Assistance Program
2007 2007
2006 2005
1999 1997
1986
CARD MUTUALLY REINFORCING INSTITUTIONS
Partnership Program in Hongkong since 2007
More than 681 Offices all over the Philippines since1986
Partnership Program in Indonesia since February 2008
First International NGO Office in Cambodia since 2006
Partnership Program with TYM in Vietnam since 2005
Geographical presence of CARD MRI
Establish-ment of an NGO office in Laos starting 2009
Microfinance Industry DataMicrofinance Industry Data
No. of Poor Household No. of Poor Household - 5M- 5MTotal Outreach Total Outreach - 2.7M- 2.7M-- NGOs (1.6M)NGOs (1.6M)-- RBs (0.8M)RBs (0.8M)-- Coops (0.3M)Coops (0.3M)20% Double Counting 20% Double Counting - 2.2M- 2.2MTotal Outstanding loans Total Outstanding loans - P16B- P16B-- NGOs (P6.5B)NGOs (P6.5B)-- RBs (P8B)RBs (P8B)-- Coops (P1.5B)Coops (P1.5B)
* out of P30B* out of P30B
MCPI, Dec 2008MCPI, Dec 2008
CARD MRI Performance as of December 2008 CARD MRI Performance as of December 2008 Operations UpdateOperations Update
Total No. of Clients Served for the Year Total No. of Clients Served for the Year 849,553 849,553 (31.46% ) (31.46% )No. of Active Members including Savers 706,890 (26.18%)No. of Active Members including Savers 706,890 (26.18%)No. of Active Clients with LoansNo. of Active Clients with Loans 684,756 684,756 (25.36%) (25.36%)No. of Insured PersonsNo. of Insured Persons 3,423,780 3,423,780Amount of Loans Disbursed Amount of Loans Disbursed P 8,773,800,924 P 8,773,800,924 Amount of Loans OutstandingAmount of Loans Outstanding P 2,804,993,921 (17.53% ) P 2,804,993,921 (17.53% ) Amount of SavingsAmount of Savings P 1,616,623,794 P 1,616,623,794Repayment RateRepayment Rate 99.49% 99.49%
No. of StaffNo. of Staff 4,102 4,102EmployeesEmployees 3,6593,659CoordinatorsCoordinators 443443
No. of OfficesNo. of Offices 681 681
BranchesBranches 430 430 Partners Partners 22Office Units Office Units 219 219 Provincial Offices 13Provincial Offices 13Head OfficesHead Offices 6 6 MRI Office MRI Office 11BDS OfficeBDS Office 1 1 Liaison Office (Cambodia) Liaison Office (Cambodia) 11BOAT Partners 5BOAT Partners 5 Partnership Office (Vietnam)Partnership Office (Vietnam) 1 1
PT TPR-CARD (Indonesia) PT TPR-CARD (Indonesia) 11XpressMoney-CARD (Hongkong)XpressMoney-CARD (Hongkong) 11
CARD MRI Performance as of December CARD MRI Performance as of December 20082008
Financial UpdateFinancial Update
Total AssetsTotal Assets P 4,907,625,973 P 4,907,625,973Total LiabilitiesTotal Liabilities P 3,899,029,597 P 3,899,029,597Total EquityTotal Equity P 1,008,596,376 P 1,008,596,376Operational Self-SufficiencyOperational Self-Sufficiency 116.14% 116.14%Financial Self-Sufficiency 105.00%Financial Self-Sufficiency 105.00%Return on AssetsReturn on Assets 4.34% 4.34%
3. Banks/FIs establishing Microfinance Units; and,
2. Banks/FIs establishing NGO/MFI;
1. NGO transforming into Banks/FIs;
Emerging Business Emerging Business ModelsModels
4. Mutually Reinforcing Institutions Approach (NGO, Bank, MBA, Training Institute).
* Slide from Mr. Jody dela Cruz
* Slide from Mr. Jody dela Cruz
a. Lack of Capital - From Non-profit to Profit Model
• Reasonable interest rates
• High dividends to investors (social and commercial investors)
• Financial Investment.. commercial loans, securitization, bonds
Overcoming 3 C’s of Overcoming 3 C’s of MicrofinanceMicrofinance
Ref: SKS Microfinance’s Vikram Akula interview, May 1, 2008 in India Knowledge@Wharton
b. Lack of Capacity - Use of best practices from the business world to scale-up
• manualization, simplification, standardization (from 1,000 clients to millions)
• McDonalds, Jollibee, Starbucks
Overcoming 3 C’s of Overcoming 3 C’s of MicrofinanceMicrofinance
Ref: SKS Microfinance’s Vikram Akula interview, May 1, 2008 in India Knowledge@Wharton
c. High cost of delivering microfinance - Use of Technology
• Computerization
• Mobile banking (internet, cellphones)
• ATMs
Overcoming 3 C’s of Overcoming 3 C’s of MicrofinanceMicrofinance
Ref: SKS Microfinance’s Vikram Akula interview, May 1, 2008 in India Knowledge@Wharton
• MFI’s market saturation in urban areas - nearing perfect market
Market BehaviorMarket Behavior
• Establishment of Credit Bureau
BEFORE
- Loans (productive, emergency)
- Savings / CBU (compulsory)
Products / Products / ServicesServices
NOW
- Loans (productive, emergency, housing, non-traditional energy)
- Savings / CBU (flexible), remittance
- Agri-microfinance
- Microinsurance (MBA / Agent Model)
- Credit with Education
Financial Institutions
- Shorter loans / tenors;
- Cutting back on commitments;
- Require guarantees / higher transaction cost; and,
- Require hard currency loans from international funders.
Global Financial CrisisGlobal Financial Crisis
Clients
- Lower loan needs
- Sluggish business activities
- Increasing number of potential clients (returning OFWs, displaced workers especially in the economic zones)
Global Financial CrisisGlobal Financial Crisis
MFIs
- Loanable funds from commercial and international funds are smaller
- Maintaining near perfect repayment rate of clients can be a challenge
- Profitability is now a challenge
Global Financial CrisisGlobal Financial Crisis