Paluwagan ng Bayan: One bank's micro-finance effort

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Empowering poor through micro-finance

Posted: 2:29 AM Feb. 28, 2005 Inquirer News Service
NAGA CITY-Fidel Cu, president and chair of the G7Bank, believes that the success of a financial institution must be measured by its commitment to serve poor communities.

The family-owned G7Bank is a success in itself. Its growth in the past 25 years of its existence has been phenomenal. From a one-branch rural bank, its network expanded in and out of this city. It now has branches in the Camarines Sur towns of Nabua, Bato and Balatan as well as in Ligao City and Polangui town in Albay.

It is now the country's third largest rural bank, based on the classification of the Bangko Sentral ng Pilipinas, and was listed by the National Economic Development Authority among the top 7,000 corporations in the country.

But the success seemed empty for the Cu family until last year when the bank decided to do an outreach program in poor communities in Camarines Sur and develop a community-based micro-financing program. It was then that the Cus started feeling good about the milestones and successes achieved by the bank.

Cu said the family and the bank personnel were moved by the hopelessness among the poor communities amid the continuing economic downturn that further decreased opportunities for livelihood.

"We feel that it is our responsibility to help our society ease the growing restiveness of the poor people. After all, whatever economic progress the financial institution has achieved is anchored on the development of the majority of the population," Cu said.

He said the program on micro-financing was actually a response to the narrowing livelihood opportunities and growing unemployment in the poor communities in the areas the bank was operating.

Before the program started, the bank deployed its personnel to do market research and come up with appropriate financial services that would empower the communities and make them self-sufficient.

Basic financial needs

Cu said the design of the micro-finance program addressed some of the basic financial needs of small entrepreneurs-including micro-enterprise development, savings mobilization and micro-insurance.

"We do these things here because we believe that ultimately, our success will be nothing if our community does not develop along with us," he said.

The micro-finance program has become a major outreach program of the G7Bank. It is now serving 6,073 beneficiaries in Naga City and in 11 towns in the province.

The concept of the program hinges on the need to provide accessible and appropriate financial services to the entrepreneurial poor families. These small entrepreneurs are those that most financial institutions would not trust because of their socioeconomic limitations and inability to put up collateral.

In the long-term, the program wants to contribute to alleviating the poverty situation of the poor communities.

The G7Bank believes that people, even if they are poor, are assets capable of improving themselves for the general good of the society.

The micro-finance program of G7Bank has 24 administrative and field staff members that carry out its projects.

They organize, train and monitor the beneficiaries and provide them technical services to achieve the program's goals. The field personnel integrate into the target communities to do market research, promote the program, form groups, provide technical inputs and guide the performance of the micro-enterprises.

The beneficiaries are formed into groups called cells, composed of five members each. Cells are then formed into a cluster that they call the Savings and Loan Center (SLC) with a chair, a secretary and a treasurer elected.
SLC officers and members meet every week and help each other resolve issues and overcome challenges of developing their micro-enterprises.

With the obvious limited financial capabilities of the beneficiaries who belong to the poverty threshold group, the micro-finance program demands no collateral in the loans applied. Instead, the field staff helps develop peer support and peer pressure among the SLC members who are made accountable for each other. Each SLC shares the responsibilities of developing the components of the micro-finance program.

On top of the micro lending and savings mobilization, the program also provides micro-insurance for SLC members and their dependents covering sickness, accident, permanent disability and death. The program also provides retirement and pension fund for members.

Humanitarian mission

G7Bank further complemented its thrust of providing livelihood opportunities to the poor communities here with humanitarian missions and projects.

It set up the FLC Foundation, which periodically provides free medical services and assistance to indigents.

Some 5,000 beneficiaries from Camarines Sur, Albay and Catanduanes have availed themselves of the foundation's medical services and assistance.

Under a special project, the foundation donated 60 wheelchairs to selected indigents with disabilities and organized a de-worming and sanitation campaign in Iriga City and the town of Nabua, which benefited 800 grade school kids.

Working with the National Voluntary Blood Services Program (NVBSP) and the Bicol Medical Center (BMC), the FLC Foundation conducts a yearly blood donation campaign by mobilizing G7Bank's employees, friends and clients. It has so far turned over 12,000 cc of blood to the NVBSP and BMC.

"Maybe these initiatives of our company are just a drop in a bucket, but we feel that we are heading in the right direction," Cu said.

by Juan Escandor Jr., Southern Luzon Bureau copyright ©2005 INQ7money.net all rights reserved

this story was taken from www.inq7money.net

URL: http://money.inq7.net/features/view_features.php?yyyy=2005&mon=02&dd=28&file=3 http://www.g7bank.com/