Case presentation - Information and Communication Technologies in Microfinance

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Microfinance Development Microfinance Development ForumForum

Amidst Global CrisisAmidst Global CrisisJANUARY 29-30,2009 @ CROWNE PLAZA, ORTIGAS AVE. COR. ADB AVENUE, PASIG CITY

“GAINING CONNECTIVITY, INNOVATIVE

TECHNOLOGIES… IN MICROFINANCE”BY: MR. GADWIN E. HANDUMON

General Manager

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Outline of the Presentation

I. Glimpse of Paglaum and its Geographical Location

II. Brief Description of Partnership with AusAID-PACAP

III. Innovations using Information Communication Technology

IV. Significant Impact

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MisamisOccidental

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55

66

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LINKAGES & PARTNERSHIP

PAGLAUM MULTI-PURPOSE COOPERATIVE WAS ADJUDGED AS MOST OUTSTANDING COOPERATIVE IN THE PHILIPPINES ON THE“COOP-LGU

PARTNERSHIP AWARDS 2006”

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PARTNERSHIP:PARTNERSHIP: PHILIPPINES-AUSTRALIA PHILIPPINES-AUSTRALIA COMMUNITY ASSISTANCE COMMUNITY ASSISTANCE

PROGRAMPROGRAM

99The FOCAS AreasThe FOCAS Areas PACAPPACAP

Iligan BayIligan BayFOCASFOCAS

Mt.

Malin

dan

gM

t. M

alin

dan

gFO

CA

SFO

CA

S

Save Labo Save Labo RiverRiverFOCASFOCAS

Coco IndustryCoco IndustryFOCASFOCAS

NN

1010

1111

1212Project LaunchingProject Launching

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ROLE OF PAGLAUM MICROFINANCE ROLE OF PAGLAUM MICROFINANCE IN REACHING OUT TO RURAL IN REACHING OUT TO RURAL

COMMUNITIESCOMMUNITIES

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Programs and ServicesPrograms and Services

LOANS:LOANS: * Regular Loans * Regular Loans * MAP (Micro-Assistance Program) * Medal PangNegosyo* MAP (Micro-Assistance Program) * Medal PangNegosyo * SSS Pension Loan* SSS Pension Loan * Disconnection Loan * Disconnection Loan * Rice Loan * Barangay Officials Livelihood Assistance Loan (BOLA)* Rice Loan * Barangay Officials Livelihood Assistance Loan (BOLA) * Market Vendors Assistance Loan * Market Vendors Assistance Loan * Express Loan * Express Loan * Spare Parts Loan* Spare Parts Loan * Micro Solar Energy Loan * Micro Solar Energy Loan * Loan Against Deposits* Loan Against Deposits * MICROFINANCE LOAN* MICROFINANCE LOAN

-Micro-Regular Loan-Micro-Regular Loan -Micro-Agri-aqua Loan -Micro-Agri-aqua Loan>Project Loan>Project Loan >Production Loan>Production Loan >Medical Loan>Medical Loan >Refinancing Loan>Refinancing Loan>Housing Loan>Housing Loan >Livestock Loan>Livestock Loan>Rice Loan>Rice Loan >Farm Mortgage Loan>Farm Mortgage Loan>Disconnection Loan>Disconnection Loan >Fishing/ Farming Equipment >Fishing/ Farming Equipment >Educational Loan>Educational Loan Loan Loan

SAVINGS:SAVINGS: * Regular Savings * Youth/Kiddie Savings * Progressive Savings Deposit * Time Deposit * Fixed Deposit * Pinoy Coop ATM

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Programs and ServicesPrograms and ServicesSpecial Project: Business Dev’t CenterSpecial Project: Business Dev’t Center*Ticketing Services*Ticketing Services *Unlimited Printing*Unlimited Printing*Loading/ reloading *Loading/ reloading *Scanning & Laminating*Scanning & Laminating*Internet Café services*Internet Café services *Encoding *Encoding *Photocopy & Reproduction Center *Photocopy & Reproduction Center *Western Union*Western Union*NCASH Card*NCASH Card

INSURANCE:INSURANCE:* * CLPP (Coop Loan Protection Plan)CLPP (Coop Loan Protection Plan)*MYRACL (Member Yearly Renewable Accident-Life Burial *MYRACL (Member Yearly Renewable Accident-Life Burial

Services)Services)*GADD & D *GADD & D (Group Accidental Death, Disablement & Dismemberment)(Group Accidental Death, Disablement & Dismemberment)*Non-life Insurance (FICA, Vehicle, Fire)*Non-life Insurance (FICA, Vehicle, Fire)*Family Group Insurance*Family Group Insurance*MMAF (Member Mortuary Assistance Fund)*MMAF (Member Mortuary Assistance Fund)*MMF (Member Mortuary Fund)*MMF (Member Mortuary Fund)

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Farm Level Grains Center(FLGC) -Farm Level Grains Center(FLGC) -IIIIII

A One-Stop-Shop service for the farmers wherein PMPC initiated the so-called “ICO” initial coop offering- wherein an ordinary Farmer can invest his/her P 10.00 for this community project (FLGC) this was made possible thru a collaborative efforts of the Gov’t Agencies : DA, NFA, LGU, Cooperators, & Community.

SERVICES OFFERED:* Palay Marketing

* Computerized Mechanical Dryer

* Solar Drying* Rice Milling*Trucking Services*10,000 bags

warehousing capacity

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PAGLAUM LABORATORY COOP PAGLAUM LABORATORY COOP for Children and Youthfor Children and Youth

1818SHS Roof SHS Roof MountedMounted

SHS Pole Ground SHS Pole Ground MountedMounted

Solar Home System InstallationSolar Home System InstallationHelps provide light to off-grid areas through MICRO-SOLAR Energy

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MFI for IPs

SHEG

PWD

2020

PAGLAUM SITUATIONER

The numerous programs & services serving the vast number of membership using the traditional simple financial transactions will limit the advancement of the cooperative.

Paglaum acknowledged its limited technical capacity so that it has tapped experts on delivering ICT’s as a service

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COOPERATIVE ISSUES:COOPERATIVE ISSUES: Difficulty inDifficulty in

Reaching remote coop Reaching remote coop membersmembers

Creating consolidated Creating consolidated reportsreports

Standardizing coop Standardizing coop processesprocesses

Members Accounts Mgt. Operations Updates

• Technical Limitations on– System database size– Inter-branch connections– Account access

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INNOVATION: INNOVATION: INFORMATION INFORMATION COMMUNICATION COMMUNICATION TECHNOLOGYTECHNOLOGY

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ADOPTION OF MICROBANKING ADOPTION OF MICROBANKING SYSTEMSYSTEM

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Microbanking System -Resolved!

INSTITUTION: Strengthen Security &

Control Automatic data recovery With system audit trail Real time & fast

transactions At par with other financial

institutions

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GENERAL MEMBERSHIP: Updated records Well-disciplined in terms

of repayment Computerized passbook printing Increase savings generation Transparency on members’

record Boosts members’ morale

Microbanking System -Resolved!

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MAINSTREAMING MFI THRU ATMMAINSTREAMING MFI THRU ATM

AS OF DEC. 31,2008: RANKED 224 IN TERMS OF SWITCH TRANSACTIONS OUT OF 3,315 MEGALINK CONNECTED

NATIONWIDE

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ATM new kick of service to MFIsLinking with banking institutions

Literacy

Easy & Wide Access

Image Building

Poorest to step on the eco-ladderCommunications & Transportation

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One Card Network / Western UnionOne Card Network / Western Union For MFIs:

Better personal cash management Easy bills payment Card to card transfer benefits Mobile top up discounts Mobile retailer package

For PMPC: Increase membership Adds revenue to cooperative Easy information access Added service offered to members Easy disbursements of funds Global market reach and presence

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PAGLAUM PARTNERS WITH A GIANT PAGLAUM PARTNERS WITH A GIANT COMPANY FOR COMPANY FOR CONNECTIVITY CONNECTIVITY

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PMPC Head Office

PLDT – IPVPN PLDT – IPVPN

A retail solution that links all the coops branches A retail solution that links all the coops branches to its head office, enabling them to electronically to its head office, enabling them to electronically

monitor its business transactions, any time of monitor its business transactions, any time of the day.the day.

Pagadian Branch

Calamba BranchCalamba Branch

Oroquieta Branch

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MFI ONLINE MARKET NAVIGATION MFI ONLINE MARKET NAVIGATION

Expanding market reach thru Expanding market reach thru KIVA.orgKIVA.org

PAGLAUMPAGLAUM CLIENTCLIENT

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$

$

$

Approve & Disburse Loan

Post client data on

Kiva

Receive 0% bulk loan from Kiva

Note the delinquencies + final impact

Repayments deducted from

new loans

Social Investor "funds" client

profiles

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BEATING THE BARRIERS:BEATING THE BARRIERS: *UNCONNECTED ISLAND OF *UNCONNECTED ISLAND OF

INFORMATIONSINFORMATIONS *INVESTMENTS- HIGH UPFRONT *INVESTMENTS- HIGH UPFRONT

COSTS COSTS *LACK OF IN-HOUSE *LACK OF IN-HOUSE

TECHNICAL EXPERTISETECHNICAL EXPERTISE *EDUCATING GRASSROOT- *EDUCATING GRASSROOT-

MEMBERS ON INNOVATIONSMEMBERS ON INNOVATIONS *SUPPORT MECHANISMS IN *SUPPORT MECHANISMS IN

DEVELOPMENT & DEVELOPMENT & MAINTENANCEMAINTENANCE

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Significant Results in the Significant Results in the OperationsOperations

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1800000

Hu

nd

red

s

1992 35 0 2,000.00 0 2000

1999 983 1,443,462 1,779,396 5,641,356 13,552,040

2008 25,833 48,609,653 42,272,771 122,117,835 170,467,671

membership Savings CBU Portfolio Asset

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Significant Results in the Significant Results in the OperationsOperations

MEMBERSHIP MEMBERSHIP GROWTH GROWTH

187%187%

SAVINGSSAVINGSGROWTH GROWTH

62%62%

CAPITALIZATIONCAPITALIZATIONGROWTH GROWTH

171%171%

PORTFOLIO PORTFOLIO GROWTH GROWTH

105%105%

ASSETASSETGROWTH GROWTH

128%128%

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This is a call to eradicate poverty and develop the community thru people’s

empowerment

We offer you partnership withPaglaum Multi-Purpose Cooperative

& Paglaum Community Development Foundation

Incorporated

3737Daghang Salamat!Daghang Salamat!