Yameoka Branch: Social Business & Micro-finance …...Yameoka Branch: Social Business & Micro-finance Hub in Manila / Grameen Australia Philippines October 2014 Activities Update Key

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Yameoka Branch: Social Business & Micro-finance Hub in Manila / Grameen Australia Philippines

October 2014 Activities Update

Key Achievements • Business Training programs for borrowers run intensively from March 2014 • Employment of Country Manager for Grameen in February 2014 • Legal Registration of the Micro-finance Organisation approved in July 2014 • Confirmation of all banking and lending procedures in place in August 2014 • First 14 loans released on 9th September, with 46 loans released as of 29th

October totalling USD 7,473 (PhP 335,000) • A total of 178 loans will be released before 31st December 2014 and a further

1,140 loans are forecast to be released in 2015. • Loan repayments are on schedule with 100% Repayment Rates to date • Loans disbursed via banking partner BanKo with all borrowers who were

previously unbanked , receiving their very first ATM card • All loans live in the cloud based Mambu IT loan management system • First contracts secured in 4 new social businesses - the new rag making, shirt

making, the rice co-op, and soap making social businesses

Loans/Savings Profile

Centre No. of Loans

Released

Amount (USD)

Repayment Rate

No. of Savings

A/C

Social Business

Loans Approved

Social Business Loans under Assessment

Silanganan (Caloocan City)

14 2,097 100% 14 1 (Supermarket bags out of

recycled materials)

Pilar (Las Pinas City)

4 1,293 100% 4 1 (USD 2,231 for wholesale

rice & charcoal business)

Lupang Arienda (Taytay)

3 781 100% 3 12 1,450 1st Payment

on 3/11/14 12 1 (Rag & Shirt

Making) Salam (Culiat)

13 1,852 100% 13 1 (Bags, purses and gifts from

coffee wrappers) TOTAL 46 7,473 46

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Financial Profile

! YTD Actual USD

(Sep 2014)!2014 Target

USD!2015 Budget

USD!2016 Plan

USD!2017 Plan

USD!

Loan Value Outstanding at Year End!

6,486! 29,111! 190,729! 481,841! 836,530!

Loans released in a year. ( 6 monthly cycles)! ! ! 282,150! 712,800! 1,237,500!

Mrs. Yamaoka Donation! 175,000! 175,000! 175,000! ! !Total Other Income! 29,282! 56,047! 79,667! 164,263! 262,080!Set Up costs! 53,075! 53,075! ! ! !Training Grants & Costs! 13,919! 13,919! 7,813! 10,558! 13,191!Operational Expenses! 14,254! 23,666! 81,445! 115,411! 160,071!Net Surplus! 123,034! 140,387! 165,409! 38,294! 88,818!Cash On Hand for Loans! 116,548! 111,276! 100,754! (188,325)! (516,975)!Fundraising Required! ! ! ! 188,325! 328,650!Bad Debt Reserve Alloc'n! ! ! 14,313! 36,261! 62,779!Planned Loan #'s! 46! 174! 1,140! 1,800! 2,500!

Overview

Mrs Y's very kind donation and two year commitment has acted as a catalyst for the development of a unique urban slum focused micro-finance bank under the name Grameen Australia Philippines (GAP) with a special emphasis on export and import replacement social business activities, ongoing business training and mentoring, financial inclusion, and cloud based IT. We have named the founding Branch "The Yameoka Branch". The newly founded Micro-finance Institution (MFI) released its first microfinance loans on 9th September. 14 women from the Silanganan Centre in Caloocan City received a total of PhP 94,000 (USD 2,098) with an average loan of PhP 6,714 (USD 150) to enable these disadvantaged women to fund their own micro-businesses ranging from food and garment retailers and cooked food vendors to peanut butter production. Silanganan is a government low cost housing community for the urban poor. It has grown rapidly over the past 10 years with many low income workers moving in and building basic shacks, with 1,000 households now living in cramped and difficult conditions.

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To date, as of 28th October, 60 loans have been approved and 46 have been released: • Silanganan Centre - 14 loans released totaling USD 2,098 (PhP 94,000) • Taytay Centre !15 loans released totaling USD 2,231 (PhP 100,000) • Pilar Village Centre - 4 loans released totaling USD 1,293 (PhP 58,000) • Culiat Centre !13 released totaling USD 1,852 (PhP 83,000) Through the Project s innovative partnership with BPI Globe BanKo Link (BanKo) we launched a new mobile phone banking platform to provide access to the very poor 'unbanked' slum communities we work with. Our initial 14 borrowers and those following were provided with their very first ATM cards, a significant milestone for these women. Initially the mobile phone platform will be integrated with our Mambu IT loan management system so loan disbursements and repayments can be managed on the BanKo platform and updated live to our Mambu database. Borrowers can also deposit into their compulsory savings account via the platform, with the savings plan playing an important role in providing long-term financial security for these members and their families. In the medium term, the Project, Mambu, BanKo partnership will offer Hub members a full range of financial services including deposits, loans, payment services, money transfers and insurance. Configuration of these products is now vitally important and is currently the Country Manager's top priority. Training, both at start-up and for ongoing business expansion remains of special importance. As knowledge of the training programs and the release of the first loans attendance at sessions has increased from an average 15 to an average of 35 at each session over the past two months. NOTE: a loan cannot be approved until the applicant has completed the training and developed a business plan that is assessed and graded according to its quality. One social business loan of 100,000 PHP (USD 2,300) has been approved and a further 3 social business applications are being processed.

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ACTIVITIES HIGHLIGHTS

Loan Disbursements • Loan submissions were assessed in a two stage process:

o The Community Credit Committee made up of leaders of the local community assess the submission and make a recommendation to the Project Credit Committee. This process ensures community knowledge is utilised to assess the funding request and empowers the Committee to make decisions on its member’s activities.

o The GAP Credit Committee includes Staff and Trustees. It analyses both the initial borrower submission and the Community Committee report to finalise the agreed loan amount.

• Loans include a compulsory savings program whereby all borrowers must deposit into a compulsory savings account to ensure their long-term financial security at an average of PhP 1,450 monthly.

• GAP has partnered with BPI Globe BanKo Link (BanKo) to manage banking facilitation. All successful borrowers received their very first BanKo ATM card upon release on their loans and were supported to withdraw initial funds from an ATM for the first time.

• Group leaders have received training in the Mambu loan system to ensure they are able to update loan repayments live into the system. Ongoing mentoring will ensure oversight of the entries.

• Loan assessments are underway for additional communities. Mobile Phone Banking • The Hub has partnered with BanKo for banking facilitation. • BanKo launched a new mobile phone banking platform and is partnering with the

Hub to provide access to the very poor ‘unbanked’ slum communities the Hub works with.

• Initially the BanKo platform will be integrated with the Mambu Loan system so that loan disbursements and repayments can be managed on the Banko platform and updated live to the Mambu database. Borrowers will also be able to make deposits into their savings account and this information will be updated live to Mambu.

• In the medium term the partnership will offer Hub members a full range of financial services including deposits, loans, payment services, money transfers and insurance.

• This development is the top priority for the Social Business Hub. !

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ACTIVITIES UPDATE

Governance • Board Membership reinforced with the joining of Robert Kuan (the founder of

Chowking - a well known restaurant chain in the Philippines) and Masud Isa (previously Professor Yunus' # 2 in Bangladesh) effective November 2014.!

• Robert Kuan is known for his successful food chain (Chowking) and is currently Chairman of St. Luke s Medical Centre and an active Rotarian!

• Masud Isa is currently Board of Director of Grameen Australia having spent nearly 30 years working in Grameen companies including CEO of five and Board Member of nine. !

!Systems and Procedures • Policy Procedures updated by Australian Volunteer and are being finalised by

Philippines Country Head for final approval by the Board at its November 21 Board Meeting

• Draft Accounting and Administration Manual discussed with Management towards implementation

• Mambu (Loans & Savings Management) System fully operational and live as of September 9, 2014

• Integration of BanKO Link System being negotiated with BPI-Globe BanKO Management

• Integration of BanKO Link System being negotiated with BPI-Globe BanKO Management Exploratory talks with Software Group Manila initiated for additional systems integration with Mambu and BanKOlink System!

• Accounting System under study !Government Registration and PCNC Accreditation

Local Government Registration! Done!

Barangay Business Permit! Done!

Pasig City Business Permit! Done!

Bureau of Internal Revenue! Done!

Tax Exemption! Done!

Filing of General Information Sheet to SEC! Done!

Certified True Copy of SEC Registration! Done!

Tax Exemption application ! In Process!

Philippine Council for NGO Certification (PCNC) Accreditation for Donor Tax Deductibility!

For processing!

Human Resource Account Officer hired effective 2nd week of October 2014. This is essential for segregation of duties and for the Community Manager to concentrate on further training and further development of Social Business Planning.

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Microfinace Activities Update !1) Silanganan Centre (Regular centre meeting on Tuesdays 1-3 pm) 14 of the 17 approved loans were released on 9th September with a total loans disbursed amounting to PhP 94,000 and a total processing fee of PhP 1,400. 3 were delayed due to work-related issues. 4 Groups have been formed. A corner bulletin board for centre activities and group attendance record has been set-up.

2) Taytay Centre (Regular centre meeting on Mondays 8-10 am) Of the 7 approved loans for its first batch of Start Your Own Business (SYOB) Training, 3 were released on 22nd September totalling PhP 35,000 and all were rag makers. The 4 additional approved borrowers will receive their loan proceeds upon payment completion of released loans under the rotating credit system. !5 new groups were formed from the second SYOB training session with 20 participants. Out of this, 16 have been approved for loans with 12 released on 27th October. A total of PhP 1,500 processing fees was collected from the two releases. A room in the church area has been designated for the Centre office.

1 Emily'Panganiban Variety'Store 10,000.00''''''2 Era'Barien Variety'Store 5,000.00'''''''''3 Gina'Garcia Frozon/Processed'Meat'Retailing 5,000.00'''''''''4 Gloria'Oscares Small'Canteen'near'Pedicab'Terminal 7,000.00'''''''''5 Helen'Grace'Opial Peanut'Butter'Maker'and'Cooked'Food 10,000.00''''''6 Helen'Sales Egg'Dealer'(Wholesae/Retail) 8,000.00'''''''''7 Mary'Jane'Sausa Burger'Stand 5,000.00'''''''''8 Media'Licandia Softdrinks'(Soda)'Dealer 5,000.00'''''''''9 Molly'Ann'Visaya Buy'and'Sell'RTW 5,000.00'''''''''10 Olivia'Laylay Variety'Store/Clothes'Sewing 6,000.00'''''''''11 Primitiva'Del'Carmen Rice'retailing 7,000.00'''''''''12 Rowena'Rocaberte Native'Food/Snacks'Vendor 8,000.00'''''''''13 Teresita'Magno Cooked'Food'Vendor 8,000.00'''''''''14 Teresita'Pimentel Buy'and'Sell'RTW 5,000.00'''''''''

Total&Loans&Released 94,000.00&&&&&&

Number& AMOUNTBUSINESSNAME

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! 3) Pilar Village Centre (Regular centre meeting on Thursday 3-5 pm)

4 of the 7 approved loans were released on 25th September totalling PhP 58,000 with a processing fee of PhP 400. The 3 additional approved borrowers will receive their loan proceeds upon payment completion of released loans under the rotating credit system.

A workshop was held on 11th September to draft MOA for coop establishment and business planning. The organised cooperative is awaiting formal registration with the Cooperative Development Authority (CDA) of the Philippines. The Memorandum of Understanding has initially been signed and Terms of Reference are being drafted. A coop / centre office has been identified.

1 Analen'Alopoop Rag'Maker 10,000.00''''''2 Marlene'Delfin Rag'Maker 10,000.00''''''3 Vilma'Juanite Rag'Maker 15,000.00''''''

35,000.00&&&&&&1 Luz'Cordova Doormat'maker 5,000.00'''''''''2 Jocelyn'Bahay Rag'maker 5,000.00'''''''''3 Fe'Agoncillo Doormat'maker 5,000.00'''''''''4 Elesa'Umil Rag/Doormat'Maker 5,000.00'''''''''5 Maria'Ana'Cabbat Doormat/Pot'holder'Maker 5,000.00'''''''''6 Juliet'Dasco Rag'maker 8,000.00'''''''''7 Reizel'Pepito Start'up'Business 5,000.00'''''''''8 Tessie'Musa Variety'Store 7,000.00'''''''''9 Lalaina'Tabor Peanut'Butter'maker 5,000.00'''''''''10 Aileen'Albarico Start'up'Business 5,000.00'''''''''11 Mercy'Villegas Rag'maker 5,000.00'''''''''12 Porfiria'Gaboy Rag'maker 5,000.00'''''''''

65,000.00&&&&&&

Number& AMOUNTBUSINESSNAME

1 Amabelle(Anastacio Food(Station(and(School(Supplies 13,000.00((((((2 April(Jane(Manila Buy(and(Sell(RTW 15,000.00((((((3 Joanne(Boneo Variety(Store 15,000.00((((((4 Marcelo(Bagabac Direct(Selling(of(Herbal/Health(Products 15,000.00((((((

58,000.00&&&&&&

Number& AMOUNTBUSINESSNAME

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4) Culiat Centre (Regular centre meeting on Fridays 1:30-3:30 pm) All 13 approved loans were released on 19th September with 5 groups formed. Total loans disbursed was PhP 83,000 with a total processing fee of PhP 1,100

The Centre has established a small corner for centre computer set-up and records storage. New members (no loans yet) are willing to open personal savings account but no compulsory MSAF contribution. 5) Valenzuela Centre Pre-Membership Orientation Seminar (PMOS) completed and 3 Groups have been formed. Conduct of SYOB Training is being scheduled. 6) Tatalon Centre Meeting with Jubilee Cooperative Board of Directors on Centre Management concerns rescheduled to November 2014. Financial and Centre Membership records being updated. 28 Jubilee Cooperative members attended the PMOS on 27th October. 7) Isla Bonita Centre – Yolanda relocatees Conducted a Cooperative Orientation Seminar on 19th August attended by 47 Yolanda Survivors relocatees facilitated by IPSCED (a Project partner NGO for Cooperative Training). The most urgent need is livelihood development to support their basic needs. 35 out of 82 heads of the family have been organised to be the founding incorporators for the cooperative registration. Pre-Membership Education Seminar, which is the first stage in Cooperative formation, was conducted by Project Team Members and IPSCED on 24th October with 33 in attendance. 8) Payatas Centre PMOS completed and 3 Groups have been formed. SYOB Training was conducted on 27th October.

1 Abdulramhman,Esmail Handicraft4beadworks,making,wallet/bags 10,000.00,,,,,,2 Adina,Suliman Malaysian,Pancake,Maker/Vendor 10,000.00,,,,,,3 Anna,Abdulrahman Snacks,Vendor 5,000.00,,,,,,,,,4 Jamilah,Ismail Fried,Chicken,Vendor 10,000.00,,,,,,5 Laiba,Candao Buy,and,Sell,RTW 8,000.00,,,,,,,,,6 Norma,Maguila Variety,Store/Gasoline,Retailing 5,000.00,,,,,,,,,7 Normina,Undong Food,Vendor 5,000.00,,,,,,,,,8 Nurhaina,Dangkalan Computer,Games,Station 15,000.00,,,,,,9 Rahima,Alang Dry,Goods,Vendor 5,000.00,,,,,,,,,10 Renante,Estioco Salon/Beauty,Parlor 5,000.00,,,,,,,,,11 Saripia,Tabonawas Buy,and,Sell,Silver,Jewelries 5,000.00,,,,,,,,,

Total&Loans&Released 83,000.00&&&&&&

Number& AMOUNTBUSINESSNAME

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Social Business Activities Update 1) Silanganan Centre Supermarket-Shopping bags out of recycled materials that can be marketed in nearby shopping malls and small supermarket. This is in line with the local government environmental initiative on minimising the use of plastic bags in supermarket and grocery stores and reusing and recycling. 2) Taytay Centre Rag making and sewing of Employee’s uniform with the aim of establishing a community-based workshop for the production of rags and employees’ uniform. Initial rag orders have been received from OceanaGold for its Head Office and Mine Site with a strong possibility of increased orders. Rag pricing is currently being negotiated with OceanaGold. Employees !uniform production will be piloted with CARDNO Philippines through its Country Manager and President of ANZCHAM. An initial order of 200 sets of uniforms has been confirmed, and the Project team is supporting the Taytay Centre to design 3 sets of sample office uniforms for finalisation. In the long term, the project aims to supply 10,000 employees of CARDNO worldwide with the office uniforms. 3) Pilar Village Centre The Project is supporting the initiative of the Pilar Village Centre to evolve into a cooperative. Registration of the Cooperative is underway. An initial loan of PhP 100,000 has been approved for its Wholesale rice and charcoal trading Social Business. Release is dependent on finalisation of the initial business plan with inputs from members of the Project Credit Committee. 4) Culiat Centre Bags, purses and assorted gift items made out of recycled coffee wrappers are the focus of the Salam-Culiat Centre located in the Muslim Community in Tandang Sora, Quezon City. Technical Support on product development and marketing is being provided through the programs academic partner, De La Salle College of St. Benilde. The university is scheduled to host a conference of Muslim leaders in Southeast Asia in 2015 and have committed to order gift items from the Centre as tokens for conference participants. This will serve as the initial target market of the Centre. 5) Tatalon Centre Organic Sausage Making business currently employing 3 families has been implemented in Quezon City through Jubilee 50 Cooperative Training was provided by an Australian Christian Missionary. Products are currently marketed in the local communities. Technical assistance on marketing and further product development is being explored with the group and will further linked to an organic pig raising social business in the near future. 6) Payatas Centre A small soap manufacture business was established by a family who received an initial PhP 5,000 loan. The project team are currently working with the family to expand the business to produce export quality soap. An initial order of 1,000 pieces to be exported to a hotel in Australia is under negotiation. The soap will eventually be marketed in hotels both locally and in Australia.

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Partnership, Linkages and Memberships with Key Organizations !• Registered as a member of the Australian Philippines Business Council (APBC) • Australian-New Zealand Chamber of Commerce (ANZCHAM)

o Attended two Monthly Membership Meetings (September & October) o Facilitated contact with ANZCHAM Executive Director o Arranged for Dana Asia Chair Peter Hunt to be the Guest Speaker at the

Monthly Membership Meetings scheduled for May 2015 • Facilitated meeting with CARDNO Country Manager Ian Porter with the

commitment to order 200 employees’ uniform from a social business being established in Taytay Centre for Rag Making and Sewing.

• Facilitated the visit of OceanaGold Country Manager, Bradley Norman and Sustainability Director Lucy Esconde to Taytay Centre, which resulted in additional commitment to order rags for its Head Office and Mine Site over and above the initial funding of USD 5,000 for the Taytay Centre.

• Facilitated the meeting with the Export Management and Industrial Design School of De La Salle College of St. Benilde in support of the Projects Social Businesses.

• Memorandum of Understanding signing with the De La Salle College of St. Benilde and De La Salle – Zobel (for technical support and volunteers), ECPAT (for child protection policy implementation), IPSCED (for Cooperative Training and Development), Isla Lipana-PwC (for legal, education, and possible Centre adoption and volunteers), Project Centres on 21st November preparations.

• Members/Borrowers products showcase in Macquarie Global Foundation Day. • QBE Funding for two community centres

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SOCIAL BUSINESS CASE STUDY Commercial Quality Rag Manufacture

Project Details

Project Summary Establishment of a social business making commercial quality rags from clothing factory waste. The project will be a cooperative and the members will receive business and marketing training, mentoring and microfinance support for the development of the business.

Project Location Manila

Initial Grant Amount

US$5,000 for Year 1

Project Start Date May 2014

Project End Date April 2015 Project Location Lupang Arenda is an urban poor community located in the lakeside community of Taytay, Rizal on the eastern part of Metro Manila. This town is part of the district of clothing factories, where volumes of textile excess are disposed. These textile remnants are bought and recycled by nearby communities into rags that are widely used as cleaning materials in factories, buildings and other industries.

Intervention The Social Microfinance Project in 2012 provided interest free loans to a poor group of women in the community with collaboration from a local Christian church. Despite encountering economic challenges, flooding and loan delinquencies the women sustained their self-managed loans, improving their capabilities and livelihood potentials.

Project Head Office

Philippines!

Taytay Centre

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Rag making is a promising home-based enterprise. These women are living significantly below the poverty threshold where a family of five should be earning PhP 7,000 per month to live with basic necessities. Lack of capital and business knowhow are the obstacles for the enterprising women to attain decent living standards. The Social Business Hub aims to facilitate the development of the women’s entrepreneurial skills, capital build up, production upgrades and management support. This intervention will lead to income generation, women’s empowerment and poverty reduction.

Rag making is a typical poor livelihood activity, turning textile waste into cash for food on the table. Capacity building, provision of capital and market linkage are the strategies to transform this home-based livelihood into a social business. Grouping the women rag makers will build their capacity for organised sourcing of textile materials, increased production and market linkage. Preparatory activities will focus on organising the active members into a rag makers association and registering it as a micro-enterprise to access assistance from government agencies. Hands-on business skills training will enable the women to develop their business plan prior to the release of loans. Collective planning for organised production will be facilitated to ensure cost effective pooling of their capital, resources and marketing potentials. The Project Team will mentor the rag makers to ensure sound business operation and loan cycle performance. Increased production and assured market will upgrade income for the 8 founding members, thereby enhancing their entrepreneurial spirit to expand production by recruiting their poor neighbours as member-beneficiaries. Income optimisation from textile remnants will be achieved through product development creating kids apparel and other household items. Networking these home-based production is aimed to mature into forming a rag makers’ cooperative, creating income out of trash and making a social impact on poverty reduction.

Enterprising women in rag making, Creates livelihood for other women and youth

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Buying clothes factory textile excess in retail produces rags and doormats.

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Organized production and market linkage to companies that need cleaning materials would

gain regular income to poor families !

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Partnerships with various institutions will be developed for collaborative undertakings on business skills training, product development, market linkage, values formation and mutual benefit assistance. Networking initiatives will have specific collaborative goals - University of Makati for trainings, College of St. Benilde for product development, RIMANSI for micro-insurance and De La Salle University for values formation. Facilitating active cooperation among stakeholders will realize the social business mission to empower the poor to climb out of poverty. Anticipated Outcomes of Social Business Approach!- Lower purchase price for raw materials - Up to 75% increase in selling price by excluding the middle-man - Increased sales volumes through new markets - Use of high-speed sewing machines funded by loans will increase production

capacity from 300 pieces per day to 900 pieces per day. This will double output income after additional variable costs and create new employment.

Rag-making Briefer Current livelihood Social Enterprise Potential Social impact Community profile: Lakeside Urban poor community. Centre operation in partnership with local Christian church

Grouping and training the borrowers will enable them to organize production, upgrade marketing and develop more valuable items

Empowerment

Source of raw materials: Raw materials come from nearby clothing factories’ waste - textile excess the women buy to produce rags, doormats and pot holders

Pooling of capital to buy textile excess in bulk volume will decrease the cost of material, various items can be produced to increase production and income

Recycling factory waste into livelihood

Production output: One member can only produce 300 pieces of round rags per day from cutting, assembly and sewing. Increased Earning Capability to minimum of USD 5.00 per day.

Capitalization on high speed sewing machines will triple the production and will create income for other women and youth as cutters and assemblers

Creating employment and income for others

Market: There are ready buyers who buy the rags and re-sell them to companies that need cleaning materials (printing, automotive, janitorial)

Gaining the capacity for volume and regular production, supply contract agreements with companies needing cleaning materials could be achieved

Profit and Sustainability

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ANNEXURE 1 - Centre Locations

! ! Centres!1! GAP HEAD OFFICE; Discovery Suites, Ortigas, Pasig City!2! Pilar Center (Blueboy), Las Pinas!3! Lupang Arenda Center, Taytay!4! Culiat Center, Quezon City!5! Silanganan Center, Caloocan City!6! Malinta Center, Valenzuela City!7! Tatalon (J50) Center, Quezon City!8! Payatas Center, Quezon City!9! Isla Bonita Center, Rosario, Cavite!

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