A Microenterprise Bank

SUSTAINING A MICROFINANCE INSTITUTION:

THE CASE OF THE CENTER FOR
AGRICULTURAL RURAL DEVELOPMENT
(CARD)

INTRODUCTION

Micro-finance institutions like the Center for Agriculture and Rural Development
(CARD) Incorporated involve transactions in small amounts of both credit and saving,
involving mainly small-scale and medium-scale businesses and producers. The poor,
who cannot run a small business because they lack capital, may also benefit from micro-
finance organization. The poor, especially poor women, are the prime reason for micro-
finance intervention in many countries like in the Philippines. The question of whether
micro-finance really benefits the poor depends on how we define poverty and what kind
of help micro-finance offers to the poor to combat poverty. The face of poverty varies
from places to places.

Poverty may mean a lack of some or all of the following:

1. Entitlement to food and other basic necessities;

2. Access to public provision of economic, social, and human
infrastructures;
3. Credit, opportunities for income generation, and consumption
stabilization;
4. Empowerment in both private and public resource allocations;
5. Access to a social safety net and other resources that help households
withstand natural and other shocks, thus safeguarding the very existence
of life and families.

Given such a multifaceted definition of poverty, it is clear that what micro-finance

can do for the poor depends on the poor’s ability to utilize what micro-finance offers

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them. In CARD, micro-finance provides a window of opportunity for the poor to access
borrowing and saving facilities. These facilities also provide organizational help, training,
safety nets, empowerment, and financial and other help during crises. Micro-finance
organizations can alleviate liquidity constraints, stabilize consumption, and enhance both
income and consumption for the poor, thereby augmenting the poor’s welfare.
Borrowing from a micro-finance facility to run a business is a self-help activity.
Moreover, micro-finance satisfies the derived demand for capital in the resource-poor
households. Success in such a business depends on (1) skill and (2) entrepreneurship,
as well as local economic conditions. Many poor participants may lack such skills and
may benefit very little from micro-finance. On the other hand, since lack of economic
growth is the cause of poverty in many economies, the success of micro-finance
borrowers is very much limited by their local economies.

Since micro-finance transactions with the poor are very small, the accrued
benefits from micro-finance may also be small. In such case, the important policy
question is whether micro-finance is indeed a “real” help to the poor. To understand
whether micro-finance really benefits the poor, we must understand who participates in
micro-finance programs, how the participants can benefit these organizations, and
whether such benefits are sustainable. When there is not much growth in an economy,
borrowing can redistribute income. Micro-finance may help the poor through income
redistribution, but benefits accrued to participants are unsustainable through income
redistribution alone.

Income redistribution also requires net income generation in the economy.

Therefore, we must know whether micro-finance helps sustain borrowers’ accrued
benefits. To know this, we must access both the participant-level and aggregate-level
impacts of micro-finance on both the short-term and the long-term welfare indicators in
an economy. Income, consumption and employment impacts are the immediate
effects of micro-finance interventions. Assessing program impacts on such outcomes is
necessary, in order to establish whether micro-finance really helps the poor participants.
Micro-finance’s impacts are made through borrowing, without assessing the borrow-level
net worth and other long-term welfare impacts are substantial and go beyond the
program participants. We need to access the impacts on aggregate welfare, both in the
short term and long term.

Thus, in this case study, we attempted to present a critique of CARD as micro-

finance institution by considering the following:

I. Brief Description of CARD

II. Philosophical Orientation/Theoretical Foundations of CARD

III. Analysis of the Approaches/Strategies used by CARD in the Context of

Development Perspectives

IV. Issues and Lessons Learned from the CARD Case

V. Guidelines and Recommendations in Formulating Development

Interventions/Strategies and Approaches

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 I. BRIEF DESCRIPTION OF CARD

A. History of CARD

A group of 15 rural development practitioners organized CARD as a social

development foundation in December 1986 as a concerted response to the growing
poverty incidence in depressed communities in Regions IV and V, particularly in the
provinces of Laguna, Quezon, Mindoro Oriental, Mindoro Occidental, Marinduque,
Masbate and the Bicol Region. The foundation’s vision has always been to eventually
establish a bank created for, owned and managed by landless poor women. In the words
of CARD Founding President and now Chairman Dr. Jaime Aristotle B. Alip, “Only by
creating a vehicle for asset ownership, can we ensure that the poor will gain
control over their own resources and over their own destiny.”

A training-focused community and livelihood assistance program for landless

coconut workers marked the start of CARD’s operation in April 1988. In 1989, CARD
pilot-tested solidarity group lending, modifying the Grameen model to suit the context of
the Philippines. Encouraged by the successful implementation of the model, CARD
launched the Landless People’s Development Fund (LPDF) as its flagship program in
1990. The subsequent years were spent on refining the methodology, with the end in
view of achieving the twin goals of outreach and sustainability. In December 1995, the
Board of Directors and management began discussing the transformation of CARD NGO
into a bank to obtain the legal basis for mobilizing deposits from the public, and enable
CARD to tap commercial loan market.

In August 1997, CARD NGO obtained from the Bangko Sentral ng Pilipinas the
license to operate as a rural bank in San Pablo City with an initial paid-up capital of Php5

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million ($167,000 USD) . Using a phased approach to transformation, 4 of 13 CARD
NGO branches were converted into the CARD Bank; the remaining branches continued
to operate under the CARD NGO. As a result of this strategy, CARD earned the
recognition as the first microfinance NGO to transform into a formal financial
intermediary, thus providing a model for other MFIs in the country and abroad.

Answering the call for organizational renewal, CARD revisited its mission and
vision in October 1999 and came up with a new mission statement: CARD is a group of
mutually reinforcing institutions, that is dedicated to ultimately empower the poor,
by upholding the core values of competence, culture of excellence, family spirit,
stewardship and simplicity. By the year 2009, CARD’s existing structures will have
been transformed into institutions that will serve as vehicles to provide more and better
services to its clients, i.e. from CARD Rural Bank to CARD Development Bank; CARD
NGO to CARD NGO Microfinance; CARD Training Center to CARD Development
Institute; and CARD Mutual Benefit Association to CARD Insurance Company. As well,
new institutions will have been created to respond to the evolving needs of CARD’s
expanding clientele, namely CARD Housing Development Company; and CARD
Marketing Centers.

B. Core Values and Principles of CARD

Upholding that the staff is the primary asset and driving force of the institution,
CARD values the continuing development of their competence and capability through
instilling the value of integrity, honesty, transparency, discipline, hard work and
excellence leading to the empowerment of its staff and members in an atmosphere of
mutual respect.

Family Spirit

CARD, guided by its genuine love for the poor, builds and nurture an atmosphere
of family spirit through mutual trust, demonstrating commitment and dedication and
sharing of learning experiences among staff and members.

Cultural of Excellence

CARD’s pioneering effort is rooted in excellence drawn from the Board and staff’s
confidence to create, innovate, inspire and continuously challenge the existing paradigm
to ultimately empower the poor.

Stewardship

The Board and staff of CARD live as stewards of its vision and builds on its
strengths, distinctive and uniqueness of its being through a framework of good
governance.

Simplicity

As CARD dedicates its life for the ultimate empowerment of the poor, CARD opts
to live a simple life in words and in deeds at all times.

C. Mission Statement (Rationale/Objectives)

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1997-1999

CARD envisions building a sustainable financial institution owned, managed and

controlled by landless rural women. CARD is committed to provide continued access to
financial services to an expanding client base, by organizing and empowering landless
rural women, and by instilling the values of disciple, hard work and saving in an
atmosphere of mutual respect.

2000 to Present

CARD is a group of mutually reinforcing institutions, that is dedicated to

ultimately empower the poor, by upholding the core values of competence, culture of
excellence, family spirit, stewardship and simplicity.

Believing in the vision statement and guided by the core values and principles,
CARD is committed to attain the following by the year 2009, to wit:

A CARD Development Bank owned, managed and

controlled by the members.

CARD Mutual Benefit Association owned, managed and controlled by

members as insurance company.

CARD Development Institute that aims to provide quality-based education

in the field of microfinance and development that is responsive to the
needs of staff, members and partners.

A Memory Bank where people can see CARD's history and mementos
with especial features on what poverty is in the eyes of the poor people
and how they are rescued from it.

A CARD Housing Development Company that aims to provide ownership

of affordable shelter and wholesome environment to many of its landless
members and staff.

Operationalization of a CARD Marketing Center where members can

actively participate not only in product development and marketing but in
pricing and negotiating aimed at getting higher returns for them.

ULTIMATELY ALL THE MUTUALLY REINFORCING INSTITUTIONS ARE GEARED

TOWARD REACHING A TOTAL OF ONE MILLION MEMBERS

D. OPERATIONAL/IMPLEMENTATION STRATEGIES CARD

The CARD implementation strategies follow the principles of GRAMEEN bank for
first 12 years. GRAMEEN Bank includes self-formed groups incorporated into “centers”.
Attendance at weekly meetings and weekly savings contributions, group fund
contributions, and insurance payments are mandatory. Savings must be contributed for

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four to eight weeks prior to receiving a loan and must continue for the duration of the
long term. The group fund is managed by the group and may be lent out within the
group. Group members mutually guarantee each other’s loans and held legally
responsible for repayment by other members. No further loans are available if all
members do not repay their loans on time. No collateral is required. Mandatory weekly
meetings include self- esteem building activities and discipline enforcement. Loans are
made to individuals within the group by the local credit officer at the weekly meetings.
GRAMEEN typically provides pre-credit orientation but minimal technical assistance.
Loan appraisal is performed by group members and center leaders.

After 12 years of operation under the GRAMEEN method and the occurrence of
some problems, CARD utilized ASA and GRASA system. Apparently, CARD has utilized
various methods or approaches to ensure its successful implementation.

CARD believes in multiplicity and pluralistic development strategies. Figure 1

shows the organizational structure of CARD.

CARD Requirements in its Micro-Finance Activities

1. Per capita income of not more than P 1,500.00 per month;

2. Total productive assets of not more than P100,000.00.
3. Has no regular job nor is a white collar employee;
4. Is between 18 to 60 years old and in good health; and
5. If unmarried, she must be her family’s breadwinner.

Membership Criteria

1. Must be willing to organize themselves into groups of five (5);

2. Must attend at least 24 hours of the Compulsory Group Training (CGT).
3. Must pass during the Group Recognition Test (GRT)
4. Must be willing to attend the weekly center meeting, pledge to save at least
Php 20.00 per week and to repay her loan regularly and on time; and
5. Must be willing to abide with the other rules and regulations of CARD.

Requisites for Group Formation

1. A group must consist of 5 self chosen people.

2. Members must come from the same village.
3. Like minded, in similar economic condition and enjoy mutual trust.
4. Freedom to choose group officers and are rotated annually.
5. New groups must be unanimously accepted by the center.

CARD Operating Systems and Procedures

1. Area Validation

The Area Manager conducts a survey on the new branch by using the
survey form containing the following information:

 Name of the Branch

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  Name of Municipal Mayor
 Distance from the nearest branch
 Servicing Bank
 Means of Transportation
 Information on Barangay to be covered
 Information on the other existing MFI’s in the area.

2. Community Orientation/Projection Meting

The branch manager with the technical officers in coordination with

the mayor and village leaders holds a dialogue with community members.
The output of such activity is a list of prospective members who have
expressed their intention to join the program.

3. House-to-House Visit/Means Testing

The Technical Officer validates the baseline information regarding the

prospective member’s demographic and socio-economic background. This
is done through actual house visit and interview with prospective member.

4. Compulsory Group Training (CGT)

a. The role of CGT: To create a culture of credit discipline and to ensure

that all members have a minimum understanding of the credit
program.

b. Principles of CGT: minimum number of hours, attendance, strict

punctuality, location and time chosen by the members.

c. The REASONS for rules and regulations must be emphasized in

training.

d. It must be supervised by the Branch Manager.

e. Suggested core contents of CGT.

It seeks to define/clarify the duties and responsibilities of the

members toward the program on the one hand and the
assistance/benefits CARD can provide on the other. It also highlights
the rationale of policies, systems and procedures which include the
following:

Group Building and Value Formation Training

It seeks to provide the participants with the knowledge, attitudes and skills
needed in forming, strengthening and managing a group or center. This module
also seeks to infuse positive values that will continuously enhance the growth of

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 the center, e.g. respect for scarce credit resource, importance of savings, virtue
of repayment and importance of good track record, among others.

It focuses on building the knowledge and skills in preparing and

facilitating group/center meetings and activities such as preparation of internal
policies and procedures needed in the implementation of day-to-day activities,
minutes of meetings and board resolutions.

1. Group Formation
2. Compulsory group Training (CGT)
3. Group Recognition Test (GRT)
4. Proposal preparation/Approval
5. Loan Disbursement
6. Loan Utilization Check
7. Weekly /Monthly Center Meeting
8. Ten Decisions
9. Financial Services

Project Management/Enterprise Development and Management

It seeks to develop and enhance knowledge, skills and entrepreneurial

capabilities of the prospective members in the development and management of micro-
enterprises. Its main output is a simple project proposal which will become the basis for
loan approval.

CARD’s MUTUALLY REINFORCING INSTITUTIONS

(1) CARD Mutual Benefit Association Inc.

The CARD Mutual Benefit Association, started in April 1994 as CARD-

Members' Mutual Fund (MMF) which aims to provide benefit to members in case of
death. Encouraged by the warm response and highly positive feedbacks from members,
CARD MMF continuously improved its benefits packages to members to include their
legal spouses and dependent children. The management of the MBA was turned over to
the members on September 9, 1999 and is now governed by its own Board elected from
their ranks.

CARD-MBA is a non-stock, non-profit mutual benefit association formed to

promote the welfare of marginalized women; to extend financial assistance to its
members in the form of death benefits, medical subsidy, pension and all loans
redemption package; and to actively involve the members in the direct management of
the association that will include formulation and implementation of policies and
procedures geared towards sustainability and improved services.

The Center for Agriculture and Rural Development Mutual Benefit

Association (CARD-MBA) is the insurance arm of the CARD Mutually Reinforcing

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Institutions (MRIs). The CARD MRIs are composed of CARD Non-Governmental
Organization (CARD NGO), CARD Rural Bank and CARD MBA. Ninety-eight (98)
percent of the CARD’s membership is women belonging to socio-economically
disadvantaged sectors.

Members of CARD NGO and CARD Rural Bank (savers not included) are
automatically enrolled with CARD MBA. As of March 31, 2004, CARD MBA has a total
membership of 108,671 households, 3,137 of whom are non-CARD members1.
Translating that figure into individuals, the Association is serving 543,355 individuals
assuming an average of five (5) members per household.

CARD MBA is now operating in eight (9) provinces namely: Laguna, Batangas,
Quezon, Marinduque, Oriental Mindoro, Occidental Mindoro, Bulacan, Masbate and
Camarines Sur. These provinces are located in the island of Luzon. Masbate and
Camarines Sur are part of the Bicol Region while Bulacan is part of Central Luzon
(Region III) and the rest are located in Southern Tagalog Region.

CARD MBA will eventually be registered as a full-blown insurance company as

soon as capitalization requirement is met. In preparation, CARD MBA is now
aggressively training its staff as well as its Board of Directors and Coordinators.

Performance Highlights as of December 31, 2003

Total Assets Php 130.82M
Total Funds Php 46.06M
Total Reserves Php 35.2M
Total Provident Fund Php 48.9M
Total Contributions Php 70.3M
Total Claims Disbursed Php 10.9M
Total No. of Claims 4,321
Total Active Members 116,395
Total No. of MBA Coordinators 73
Total No. of Personnel 11

Products and Benefits

 Life Insurance
 Total & Permanent Disability (TPD) Cover
 Provident Fund/ Retirement Savings
 All Loans Insurance Package
 Refund of Contribution
 Marketing Assistance Program
 Mass Wedding
 Livelihood Training Program (LTP)

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 CARD MUTUAL BENEFIT ASSOCIATION, INC.

Institutional Background

The Center for Agriculture and Rural Development (CARD) was established in
1986 as a non-profit, non-political foundation. On April 1988 it started its operations with
a training and livelihood assistance program for landless coconut workers. In January
1989, CARD pilot tested a modified Grameen Bank scheme in four villages of San Pablo
City, Laguna. The results were positive that it became a full-scale program in 1990.

On September 1, 1997 CARD Bank was opened in San Pablo City, becoming the
first micro finance NGO in the Philippines to transform into a bank. CARD NGO
branches have been transferred to bank operations on a branch-by-branch basis
depending on their level of sustainability and on regulatory constraints imposed by the
Bangko Sentral ng Pilipinas (Central Bank of the Philippines). CARD has already begun
to sell CARD Rural Bank shares to qualified members and staff to ensure that the
original goal of creating member-ownership of the rural bank is achieved.

The Members’ Mutual Fund (MMF) was established by CARD on April 1994 for
the primary purpose of loan redemption in case of death of member-borrowers. Since
then, it has served as insurance fund providing death benefits for the members and their
legal dependents and loan redemption for member-borrowers. In December 1996, the
Pension Plan was implemented providing retirement, medical and disability benefits to
members. But due to the absence of an actuarial study, it was stopped after more than
two (2) years of implementation when the management realized that the Pension Plan
was eroding the fund. In support of the members’ empowerment goal of CARD, the
management of the MMF was officially turned over to the members on September 9,
1999 during a 2-day workshop held in San Pablo City. The fund henceforth assumed a
new name, the CARD Mutual Benefit Association, Inc. (CARD MBA), a separate legal
entity owned and managed by the members. Henceforth, CARD MBA became a
member of the CARD Mutually Reinforcing Institutions (CARD MRIs).

Socio-Demographic Profile
CARD MBA’s head office is in the same location as CARD NGO and CARD Bank
in San Pablo City, Laguna, Philippines. San Pablo City is about 80 km south of Manila.
San Pablo City is well within the ambit of the CALABARZON2 masterplan. It is the center
of trade, commerce and major services of neighboring municipalities like Calauan,
Alaminos, Nagcarlan and Rizal in the province of Laguna and Dolores and Tiaong of
Quezon Province. San Pablo is fast becoming the hub of regional operations for several
government agencies and private companies. Already a concentration of regional offices
of the national government continues to draw clientele from different provinces of Region
IV – the Southern Tagalog Region.

CARD-MBA Mission Statement

CARD-MBA is a mutual benefit association formed to promote the welfare of
marginalized women; to extend financial assistance to its members in the form of death
benefits, medical subsidy, pension and loan redemption package; and to actively involve

10
the members in the direct management of the association including formulation and
implementation of policies and procedures geared towards sustainability and improved
services.
Legal and Organizational Structure
CARD MBA is registered with the Securities and Exchange Commission (SEC)
and was licensed by the Office of the Insurance Commission (OIC) to operate as mutual
benefit association. Majority of the members of the Board of Trustees has two-year term
and minority has one-year term and is provided with honoraria on a per meeting basis.

There were several changes in the rules and regulations of the MMF to conform
to the regulations of the OIC. Member’s contributions and benefits have been
restructured based on an actuarial study conducted on the Fund to accelerate the
stabilization of the fund. A small team of full-time personnel (8 staff) at the Head Office
headed by the General Manager handles the day-to-day operations of the Association.
There are three (3) CARD MBA Provincial Offices which are located in Atimonan,
Quezon with three (3) full-time staff; Victoria, Oriental Mindoro with two(2) full-time staff
and in Masbate City, Masbate with three (3) full-time staff. MBA Coordinators, who are
members of the Association, are assigned in each branch where CARD operates. They
are elected by the CARD branch’s general membership. Its own Board of Trustees
elected from among the Coordinators now governs the Association.

A Board of Advisers composed of people from the top management of CARD act
as advisers to the Board of Trustees in an ex-officio capacity (Figure 1). This body
provides advisory support in matters related to management of the MBA and is intended
to be a temporary arrangement as the Board of Trustees builds its governance and
management capabilities. The role of the Board of Advisers is envisioned to be de-linked
with the Board of Trustees as soon as the latter is able to handle effectively the
operations of the Association.

The results of external audit are positive; there is effective management of

changes in the organization; no serious complaints against the management and the
Board; and that the original mission of CARD MBA is carried, that is to help members
and their families overcome risks.

Funding Source and Investment

Funding of CARD MBA is basically sourced from members’ weekly contributions.

Each member contributes Php 10.00 weekly (Php 5.00 for Life Insurance and Php 5.00
for their Provident/ Retirement Savings) to the Association for as long as she is a
member. For non-CARD members, contributions can be paid monthly (Php 40.00);
quarterly (Php 120.00); semi-annual (Php 240.00) and annually (Php 480.00) but not on
a weekly basis.

Aside from the weekly contributions, other source of fund of the Association is
the 1.5% loan redemption fees being deducted from the proceeds of loan under its All
Loans Insurance Package program.

On December 31, 1999 the year ended when MMF became CARD MBA, CARD
MBA’s total asset stood at Php 6.61 million. By March 31, 2004, CARD MBA’s assets

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significantly increased to Php 144.9 million. The funds are invested in the government
retail treasury bonds and into time deposits.

Market and Clientele

The client-members of the Association are the members of CARD NGO and
CARD Bank, which essentially is a captured market. CARD targets landless women who
have monthly per capita income of Php 1,500.00 and below. The cut-off used by CARD
in terms of marketable household assets to qualify with its lending program is Php
150,000.00, which is consistent with the capital limit in order to be included in the
microfinance market as specified in RA 8425, otherwise known as a Poverty Alleviation
Act.

MBA Coordinators, whose main function is claims’ validation, are assigned in

each branch where CARD operates (Figure 1). It is also through these Coordinators
where feedback from the members at the center level is channeled. The MBA
Coordinator, who is also a member-borrower of CARD, coordinates with the Center
Chiefs and Branch Managers in terms of claims’ validation and reports needed by the
MBA head office.

The links from top-to-bottom and bottom-to-top allow for the timely settlement of
claims and high quality feedback mechanism. Before any new product or innovations are
introduced to members, such mechanism is used to guarantee wide acceptance among
members of any changes in the Association’s products and services.

Direct competition for membership in the micro-insurance market is virtually nil in

areas where CARD operates. But there are several indirect competitors because
commercial insurance companies develop products suited for the clients of microfinance
industry. They are considered as indirect competitors in the sense that ownership of the
microinsurance program still belongs to the insurance companies unlike the MBA where
the ownership belongs to the active members of the Association.

PRODUCTS AND SERVICES

The CARD MBA provides a micro-insurance program for the poor. It has the
following product and services for the members:

1. Life Insurance Program

Upon payment of the first weekly contribution, a member and her legal
dependents have life insurance coverage, the amount of which depends on the length of
her membership. The legal dependents of a legally married member are the following:
a. her legal spouse;
b. her first three (3) legal and/or legally adopted children who are single and below
21 years old;
c. in her first three (3) legal and/or legally adopted children, her legal children who
are single and more 21 years old but disable can be included;

If a member is single, her legal dependents are her parents 60 years old and above.

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In case of death of the member or any of her legal dependent, the beneficiary will be
indemnified, the amount of which depends on her length of membership to Association
and is shown in the table of Life Insurance Benefits.

2. Total and Permanent Disability (TPD) Cover

There are two causes of TPD under this program:

2.1. Due to accident resulting to:

2.1.1. loss of both sight

2.1.2. loss of both feet;
2.1.3. loss of both hands;
2.1.4. loss of one foot and one hand.

This type of TPD can be settled immediately upon submission of complete claims
documents.

2.2. Due to sickness/disease or accident – If a member or her legal dependent

become sick resulting to complete inability of a member or her legal dependent to
engage in any gainful employment and becomes bedridden or met an accident without
dismemberment resulting to complete inability of a member or her legal dependent to
engage in any gainful employment and becomes bedridden, they can be considered as
total and permanently disabled if after six (6) months their health condition has not
improve. After such confirmation, they will receive the monthly benefits as shown in
Table of Monthly Benefits for Total and Permanent Disability.

3. Provident Fund / Retirement Savings

It is an administered fund intended for the retirement of members that can be

availed of in lump sum at age 65. An active member pays her contributions until she
reaches the retirement age of 65. These contributions are being invested in high yielding
investment instruments to assure members of their retirement pay.

Depending on the entry age of a member in the CARD MBA, the Table of
Benefits at Age 65 shows the accumulated fund at age 65 assuming default-free-
contributions and the possible retirement funds allotted to the members. The exact
amount of retirement fund depends on the investment income of the fund.

If a member decides to retire prior to age 65 (early retirement) and she has
completed a minimum of three (3) years of continuous membership in the Association, a
member shall be entitled to an equity value equivalent to 100% of the total contributions
collected from her, plus regular savings interest and not the calculated amount of
benefits at age 65 as stated in the table above.

4. All Loans Insurance Package

All Loans Insurance Package (ALIP) is an innovation of the Loan Redemption

Fund (LRF) to give full loan protection to its member-borrowers and also to protect the
CARD MBA’s accredited lending institutions by ensuring 100% collection of loans
extended to the members in case of death. The ordinary LRF pays only the balance of

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the loan but with 1.5% of the principal amount of loan as contributions, the program pays
the principal amount of loan of the dead member-borrower. Upon receipt and approval of
due proof of death, CARD MBA will pay:

the lending institution - the outstanding balance of loan at the time of death.
her beneficiary - the paid portion of the loan at the time of death.

This is on top of the life insurance benefit that the beneficiary can get from the
Life Insurance Program of CARD MBA.

5. Refund of Contribution

Upon resignation before the age of 65 and after three (3) years of continuous
membership, the member is entitled to:

5.1. Fifty (50) percent refund of all the contributions made for Life Insurance less the
amount of claims paid.

5.2. And 100% of all contributions made for Provident/retirement savings fund plus
regular savings interest.

6. Marketing Assistance Program

Marketing Assistance Program was established to help the members of CARD

MBA to look for buyers of their products trying to lessen the intervention of middlemen in
the marketing of their products.

The Office of CARD MBA provided a display cabinet where willing members can
display their products for visitors to see. It is actually a show window of how creative our
members are. The products that they will display in the cabinet should have a tag to
properly identify them.

7. Mass Wedding

Mass Wedding is an additional service being for the members who have live-in
partners and have been members of the Association for at least 10 months prior to the
wedding celebration. This is one of the highlights of the Branch Convention.
However, we are advising all concerned members not to wait for the Convention to get
married so that they can enjoy the full benefits that the CARD MBA can offer to its
members.

8. Livelihood Training Program (LTP)

LTP is a program of CARD MBA in coordination with the Department of Trade &
Industry (DTI) and Technical Education and Skills Development Authority (TESDA).
Members themselves through their Branch will request what skills on what type of LTP
they wanted to learn. If there will be more than one type of LTP requested, the most
requested one will be provided to them.

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 Then CARD MBA will look for a resource person thru DTI or TESDA. And from
the first batch of each type of LTP, two to three member- trainees will be selected to be
the TRAINORS for the next batch of LTP of the same type. This is to ensure continuity
and extra income for the member-trainor and at the same time empowering them thru
new skills

IMPACT TO MEMBERS

Surveys showed that the products and services of CARD MBA have been rated
as number one in terms of clients’ satisfaction. Members were saying that they joined
CARD and not to other microfinance institution because of the benefits that can be
derived from MBA.

CARD MBA has been able to meet a specific demand of client-members for
insurance in case of death to cover burial expenses, to repay the loan in case of death of
a member-borrower, and provident fund or retirement savings for old age. There has
been a high level of satisfaction for these products (Life Insurance, All Loans Insurance
Package, Provident/retirement savings fund) provided by the Association.
Responsiveness to members’ needs is high. For example, in the case of Life Insurance,
death claims are paid even before burial as long as all necessary documents are
complete and submitted for validation.

Meanwhile, health insurance and educational assistance are the two demands
that are still unmet but actuarial studies are already underway to determine their
feasibility.

Mass Wedding is also a welcome service to them because the children of

members with live-in partners were legitimized and became their legal dependents. It is
CARD MBA’s way in initiating a moral recovery program of the community where it
operates.

INSTITUTIONAL EFFECTIVENESS

In February 2002, a full-time manager was hired to handle the day-to-day

operations of the Association. The hiring of an insurance specialist demonstrated the
Association’s seriousness in running its operation professionally. The MBA Coordinators
act as the channel for information dissemination and feedback mechanism of the
Association. They attend Center Chief meetings and disseminate information in these
meetings, which in turn, the Center Chiefs disseminate to members. They are also
required to visit at least four (4) centers a month to know problems of the centers and
solicit suggestions as how to solve the problems. The Coordinators also coordinate
closely with the Branch Managers and Technical Officers especially when it comes to
claims settlement and when there are new products that are to be introduced or when
there are changes that are to be made on existing products. These Coordinators receive
monthly incentives and are covered for actual expenses incurred in the performance of
the duties. They also perform underwriting functions that include enlisting CARD and
non-CARD members and monitoring status of membership. The Coordinators are the

15
direct link of the Association to the members. Monitoring of the Association’s operations
is through Provincial Offices. At present, there are two (2) existing Provincial Offices and
there are six (6) more to be opened as part of the CARD MBA’s seven-year business
plan.

As regards the management of risks, CARD MBA as a matter of procedure relies

heavily on actuarial risks analysis of products introduced to members. An actuary expert
is usually contracted by the Association to conduct actuarial study.

In terms of marketing and delivery of services, the Association essentially uses

the existing Provincial Offices and branch network of CARD. It enables the Association
to effectively promote the products and transact business with its members as center
meetings of branches are conducted on a weekly basis. Further, costs are minimal in
that MBA Coordinators, elected from the branch’s general membership, are mobilized to
perform underwriting functions.

The non-CARD members are the immediate family members of the CARD
members who can no longer be considered as their legal dependents (sons and
daughters who are more than 21 years old), resigned members from CARD who wish to
continue their membership with CARD MBA and members of other micro finance
institutions whom CARD MBA is assisting in putting up their own MBA.
CALABARZON is a project for the development of the provinces of Cavite, Laguna,
Batangas, Rizal and Quezon.

(2) CARD’s MICROFINANCE PROGRAM

CARD’s microfinance program consists of three major components, each being

equally important: training, credit, and savings mobilization.

1. Training aims to assist the members and local leaders in acquiring the knowledge,
skills and attitudes for effective management of their centers and livelihood projects
as well as to enable them to respond to socio-economic problems confronting
them.

Prospective members are required to attend 24 hours of initial training, called the
Continuous Group Training, which ends with the participants being recognized as
program members.

In 1996, the CARD management devised a new educational tool called the Center
Development Calendar (CDC). Facilitated by the Center Chiefs during the weekly
meetings, the CDC outlines weekly training sessions, and aims to review/reinforce
the concepts learned during the CGT and to introduce additional concepts such as
gender sensitivity, family life management and environmental conservation.

2. Credit. This component addresses the financial requirements of non-bankable

microenterprises, which the members would like to undertake. The credit delivery
scheme is linked with savings and capital formation thereby enhancing the
creditworthiness of the members and contributing to the program's sustainability.

Loan Products CARD currently offers 2 major loan products to suit its client needs:

16
 Sikap Loan are provided to finance various microenterprises such as vending,
crop and livestock production, hollow blocks making, bakery operation,
dressmaking and fish drying, among others. Used to finance larger businesses
requiring more capital or to procure fixed assets. Finances the purchase of a
house, lot and/or consumer durables or improvement of an existing one.

Sagip Loan Addresses the clients’ consumption needs, i.e., education, health care
and other important social functions such as baptismal and weddings.

3. Savings Mobilization . CARD subscribes to the view that the poor can save. It
also recognizes savings as a readily available cheap source of loanable funds.
Hence CARD believes that a strong savings mobilization is essential to the
program's sustainability by lessening dependency on donor grants.

4. Micro Insurance (please refer to CARD-MBA for details)

SIKAP LOAN

Loan Cycle Loanable Amount Terms Interest

1st Loan P 4,000.00 6 mos. or 1yr 20% per annum plus 4% service fee
2nd Loan P 8,000.00
3rd Loan P 15,000.00
4th Loan P 30,000.00
5th Loan P 50,000.00
6th Loan P 80,000.00
7th Loan P 150,000.00

SAGIP LOAN

Loanable Amount Terms Interest

Min, of P2,000 with 1,000 increase per cycle until P10,000 3 or 6 mos.
renewable upon 50% of payment

10% per annum

Target Clients
CARD’s target clients are landless poor women who qualifies the
following criteria:

Per capita income of not more than P1,500 per month;

Productive assets of not more than P100,000;
House Index score of not more than 6 points.

Other services

CARD NGO offers several non-financial services, mostly training and exposure
programs, to other MFIs, local and international, interested in replicating CARD’s
savings, credit and micro-insurance methodology. For more details please refer to the
CARD Training Center.

17
 (3) CARD TRAINING CENTER/INSTITUTE

The CARD Training Center was inaugurated on February 14, 2000.

Training has been an integral part of CARD’s assistance both for staff and members of
the program. Over the years, CARD was able to develop a technology which further
supports the worldwide belief that poor people has to have their own share in the
upliftment of their own economic status and quality of life. In this aspect, CARD believes
that development can only be realized through a combination of an effective community
organizing approach and a highly sustainable savings and credit program.

CARD’s Training Program and Activities revolved around the strategies that CARD
utilizes and has proven in the field of microfinance operations. Thus, the major activities
being carried-out in the implementation of the Credit and Savings methodology in effect
become its training offerings. The training contents and methods are designed to assist
participants, donor agencies, non-government agencies, peoples’ organization and or
government agencies to replicate the same credit and savings program in their own
areas, or program after participating in the following series of courses.
CARD is committed to take its part in eradicating poverty in the Philippines as expressed
in its mission statement. With its proven technology in the field of savings and credit
program, the Training Department is actively doing its share in the dissemination of its
technology not only to its members but to other NGOs, MFIs, coops and banks.

Methodology

CARD's conduct and delivery of training courses is unique. It is practitioner led

whereby only proven technologies and well-tested systems and procedures are shared
during the training by CARD's most experienced and competent directors and staff.

In addition, it provides ample opportunities for hands-on learning in actual

branches and areas covered by its microfinance operations.

CARD TRAINING PROGRAMS

Orientation on GBA Program

This is a 2 to 3 days orientation designed for microfinance staff which aims to

provide participants a thorough orientation and exposure on CARD's GBA operating
systems and procedures. The lectures are complemented by field exposure to branches
and centers.

GBA Implementors’ Training

Under this program course, participants are expected to acquire basic

knowledge, skills and positive attitude towards the application of basic principles in
Grameen Banking System into their own microfinance or GBA operations. The course is
conducted such that practical inputs acquired from experience are shared by
practitioners who are mostly CARD's directors and staff in order to substantiate any and
all theoretical inputs that may be shared and asked by the participants.

18
The following topics shall be discussed in details during the course:

 Managing Rural Microfinance Program

 Basic Trainer’s Training on Team Building and Value Formation.
 Basic Financial Management
 Creating and Maintaining Strong Credit Discipline.

NGO Transformation Course

This is a two-three day sharing of how actually CARD as an NGO evaluated and
planned the establishment of CARD Bank, and how exactly the CARD Bank has
complied with all the requirements and regulations of the Bangko Sentral ng Pilipinas.
This is an exciting course for everyone especially NGOs and MFIs who are dreaming to
establish their own bank in the future. The course is designed for high ranking officers
and Board of Trustees/Directors of the institution.

Special/Customized Courses and Study Tours. The CARD Training Center, at

any time, can prepare for any special or customize training course for any bank,
microfinance institution, NGO or cooperative that will suit their unique, individual needs
and concerns regarding microfinance development and or expansion. It has, in fact,
conducted a month-long training and exposure with __ MFIs from Central and Latin
America which was sponsored by the Grameen Foundation USA in August-September
2001.

The Faculty

The Faculty of the CARD Training Center is composed of young men and women
practitioners with more than 15 years of proven experiences that honed their individual
expertise in the field of microfinance, financial management, banking, savings
mobilization (in process) and over-all financial intermediation (in process). This expertise
coupled with selfless motivation and genuine dedication to share the technologies and
help other practitioners and would-be practitioners distinguished them from the others.

DR. JAIME ARISTOTLE "Aries" B. ALIP,

Rural/Community Development/Microfinance Specialist/Chairman
Dr. Jaime Aristotle B. Alip or 'Aries' to many friends, is the founding President
and currently the Chairman of both the CARD NGO and CARD Bank. He has been in
the forefront of rural development for more than 20 years, working both in the public and
private sectors.
His consulting career covered several Asian countries, including Vietnam, Laos,
Cambodia, China, East Timor, Bhutan, and Thailand for international development
agencies such as CRS, Oxfam America, DRC, ADB, and UNFAO, among others. He is
presently the Southeast Asia regional credit advisor of Oxfam America for its programs
in Indochina and the Philippines. He is also a member of the Advisory Board of the
Canadian International Development Agency (CIDA) Philippines and is one of the
directors in Garilao and Associates, Inc., a consultancy group that specializes in agrarian
reform program, integrated area development, and country strategy

Facilities

19
Accommodations: CARD Training Center offers the following accommodation:

 Two to three (max) in a room with natural hot shower facility; with provision for a
maximum capacity of 70 occupants at a time;
 All rooms are fully air conditioned with intercom facility.

Training and Meeting Facilities

The Training Center has two conference rooms, which are equipped with the
audio-visual equipments such as In-Focus projector, television set, VHS/VCD/DVD
players, wireless microphones, component and a multi-media projector for any computer
presentations.

The Training Center also has its mini-resort complete with spa and swimming
pool where natural hot water flow continuously giving the much needed relaxation after
long day of discussions, workshops, field exposure and other activities

Another latest addition is the newly constructed CARD Inter-Faith House of

Worship open for participants from any religion and beliefs.

CARD’S Training Program and Activities

1. Technical Officer Ready to Go

This 15 days training is designed for new staff of the CARD-MRI. The training will
be divided into three main parts, namely the pre-exposure, field exposure and induction
training.

In the first phase, the prospective TOs will be invited to attend the pre-exposure
orientation that will be facilitated by the CARD Training Center. There will be a series of
presentations on CARD’s history, mission, accomplishments and branch operating
systems and procedures. Logistics and use of the field exposure guide will also be
discussed.

During the field exposure, each participant will be assigned to a branch and
accompanied by an experienced TO in observing all the available branch activities
indicated in the field exposure guide. Interviews, project visitations and familiarization
with branch forms and documents will be done as a part of their field learning.

In order to make use of the participant’s experiences and learning that they
gained during their field exposure, the induction training will use simulations, small group
discussions and lectures. Simulations of the operating systems and procedures will
enable the participants to put in practice their knowledge on a specific activity and
provide opportunities to check and correct any inconsistencies.

2. Re-orientation and Training of CARD-MRI staff

This 3 days training is designed for the participants to verbalize the rich history
and explain the mission and vision of CARD in relation to its Mutually Reinforcing
Institutions (MRIs). The training will also include lectures and workshops on the staff

20
duties/ responsibilities and review of the CARD operating systems and procedures. Also,
the training aims the participants to put in practice the different skills and techniques in
the conduct of office and field activities. With the current situation on the program, the
training would also serve as venue for the exchange and formulation of center
rehabilitation strategy that is suitable in their respective branches.

3. Credit with Education

Started in year 2000, the CARD Center teamed up with Freedom from Hunger
(FFH) to disseminate the needed knowledge on business and health related topics to
our clients. During the assessment and surveys conducted by FFH, it was found out that
both the staff and client benefited from the trainings and facilitations conducted to the
two parties. After the training, it is expected that the participants would become better
facilitators on trainings/learning sessions, develop self-confidence, provide clients with
useful recommendations in handling their respective businesses and safe guarding
family health. The 3 day training on the Business or Health learning session is
composed of series of lectures, workshops, field exposure (community explorations and
simulations of the different learning sessions.

4. CARD MRI “Lakbay –Aral” for Selected Center Chief

In general, the study tour is aimed to provide the clients a clear understanding
and appreciation of CARD as a Mutually Reinforcing Institutions that is ultimately
dedicated to improve their quality of life.

5. Basic Training for Branch Managers

This 3 day training is designed for newly appointed and the most senior
Technical Officers in line for becoming a Branch Manager. At the end of the training, is it
expected that the participants will be equipped with needed managerial competence that
will ensure effective supervision of the day-to-day branch operations.

6. Advance Training for Branch Managers and Area Managers

The advance training for BM and AM is designed to provide the BM and AM the
needed competence in providing high quality of management on the area/branch under
his/her jurisdiction. The 3 day training will also help the participants to enumerate and
develop techniques complying with their respective duties and responsibilities

7. Area Development and Management

The primary objective of the training is to further develop the knowledge, skills
and attitude of the area managers in performing their duties and responsibilities
especially in monitoring and supervision of the area/branch operations.

8. Public Speaking and Facilitation Skills Training

21
 CARD through its MRI has developed proven effective methodologies in poverty
alleviation. Along with this process, it also developed a group of people with a highly
acceptable experience and knowledge on their field of expertise. To fully strengthen their
facilitation and sharing of their knowledge and rich experience, the training on Public
Speaking and Facilitation Skills was conceptualized.

The training aim to help the selected members of the pool of resource people to
develop facilitation skills, enumerate the different principles of adult learning, prepare
visual aids and verbalize the concepts and theories in facilitation/training. The training is
composed of lectures, small group workshops and simulations to help participants to
strengthen their self-confidence.

9. Customer Care and Personality Development

CARD believes that developing and maintaining high quality of customer care
and personality are crucial in the program sustainability. The 2-day training on Customer
Care and Personality Development is designed to strengthen the existing bond between
CARD Staff and its clients. The personality development workshop will focus on the
identification and practice of the highly accepted attitude towards a healthy family and
career life.

(4) CARD BANK

“Only by creating a vehicle for asset ownership, can we ensure that the poor will gain
control over their own resources and over their own destiny.”

JAIME ARISTOTLE B. ALIP

Founding President and Chairman, articulating CARD’s vision of creating a bank

owned and managed by poor landless rural women through share ownership and
representation in CARD Bank’s board.

On September 1, 1997, in San Pablo City where it all started, CARD Rural Bank
opened its doors to the public. The event marked a first in the Philippine rural
development landscape: CARD is the first microfinance NGO in the country to transform
itself into a bank. At the time of its transformation, CARD was on the 8th year of its credit
and savings operations, using a modified Grameen Bank methodology to bring financial
services to landless rural poor women in the provinces of Laguna, Quezon, Masbate,
Mindoro and Marinduque.

The founding vision of CARD to create a bank owned and managed by landless
rural women has been faithfully kept alive by board members, management staff as well
as its members. It has been a rallying point for the leaders and staff to move forward,
reach more number of poor people and at the same time aim for viability. In the same
manner, the prospect of becoming owners of their own bank has inspired the members

22
to practice credit discipline. Hence, when the time was deemed ripe, measures were set
into motion towards the realization of this dream.

Bank Owned by the Poor

More than one thousand CARD clients became owners of CARD Bank shares of
certificates, which were awarded on February 14, 2000 on the occasion of the
inauguration of the CARD Training Center in Brgy. Tranca, Bay, Laguna.The clients
proudly held in their hands proof of CARD’s oft repeated promise of a bank owned by
landless poor women.

CARD Bank believes that the poor is a heterogeneous group that has a variety of
financial service needs. Hence it is committed to provide a wide range of services to its
clients including loans, savings and micro insurance.

Flexible loan products

To meet the loan requirements of its solidarity group members, CARD Bank
offers two loan products, namely the Sikap or regular loan and the Sagip or Emergency
loan. To its more mature borrowers, CARD Bank San Pablo City Branch is pilot-testing
the provision of individual loans. Likewise, Salary Loan to municipal government
employees is being pilot-tested in CARD Bank Marinduque Branch.

Savings products

CARD Bank subscribes to the view that the poor can and does save. It also
recognizes savings as a readily available cheap source of loanable funds. Hence CARD
Bank believes that a strong savings mobilization is essential to its sustainability by
lessening dependency on donor grants.

Members are required to deposit P20 (US$0.40) a week as their pledged savings
into their Center Fund account. The Center Fund account was previously managed by
the members and utilized for on-lending to members for emergency and educational
purposes. Currently, it can serve as the members’ equity in the Bank if they decide to
purchase shares of stocks or kept as savings, earning not lower than the market rate.
Members of CARD Bank are encouraged to maintain a voluntary (Kayang-kaya) savings
account. As a regulated institution, CARD Bank also accepts deposit from the public.

UPDATE as of December 2003

Savings Accounts 55,829
No. of Active Loan Clients 31,090
No. of Loans 50,155
No. of Branches 9
Repayment Rate 99.77%
Portfolio at Risk 1.00%
Operational Self-Sufficiency 140.70%
Financial Self-Sufficiency 117.28%
Admin. Cost Ratio 31.90%

23
 Portfolio Yield 43.77%
Adj. Return on Assets 3%
Total Assets Php 425.93M
Total Equity Php 53.08M
Total Staff 202
Total Loan Officers 96

Major Partners

German Savings Bank Foundation and Essen Bank Germany (GBSF)

Foundation for Sustainable Society, Inc. (FSSI)
Grameen Foundation USA
Freedom From Hunger (FFH)
Plan International
Grameen Trust (GT)
Embassy of Japan
CORDAID
CASHPOR/ PHILNET
Women’s World Banking (WWB)
Catholic Relief Services (CRS)
OXFAM AMERICA
World Vision Australia and World Vision Development Foundation, Phils.
Consultative Group to Assist the Poorest (CGAP)

Other Partners
People's Credit and Finance Corporation (PCFC), Manila
Asian Community Trust – Japan
Philippine-Australian Community Assistance Program (PACAP), Makati City
AusAID, Makati City
Consultative Group to Assist the Poorest (CGAP), Washington, D.C., USA
Land Bank of the Philippines, Manila
RKK Fund for Peace, Japan
Nice Heart Foundation, Japan
Misereor, Germany
PDAP, Canadian International Development Agency, Manila
Agricultural Credit and Policy Council – LBP
Department of Agrarian Reform, Manila
Department of Trade and Industry, Region IV
Mrs. Doris Stivers, Maryland, USA
Ms. Martj Buning, The Netherlands
St. Luke’s Methodist Church, Maryland, USA
OIKOCREDIT, Makati City
CRS-Microfinance Alliance Fund, Manila
CRS-RISE Inc., Manila
Grameen Bank and Grameen Trust, Bangladesh
ASA, Bangladesh
CASHPOR, Malaysia
PHILNET, Philippines
Microfinance Council of the Philippines

24
 II. PHILOSOPHICAL ORIENTATION/THEORETICAL FOUNDTION OF CARD

IDEALISM

CARD believes in promoting people empowerment by enabling all citizens

through direct participation in policy formulation and decision making. It believes in its
capacity to improve the quality of life of the Filipino poor, especially those residing in the
countryside.

As stated in its visions, CARD believes in its capacity to empower the landless
sector, particularly women, so that they can have access to and control over their
resources. Its empowerment is driven by some ideal core values of competence, culture
of excellence, family spirit, stewardship, and simplicity. These values emphasize mutual
trust, good governance, and genuine love for the poor, integrity, honesty, discipline, hard
work and excellence.

More concretely, CARD operationalizes these idealisms through the members’

creed that requires them to attend weekly meetings, to pay the compulsory savings of
P20 every week, to pay weekly amortizations for loans availed, to collectively face and
solve group problems and difficulties, to plant nutritious crops, cooperatively build a
Center House, to always clean and safeguard their environment, and to avoid all forms
of vices such as drinking, smoking, and gambling.

EXISTENTIALISM

CARD believes in the existential tenet that man has free will and is responsible
for himself. Thus, it gives importance to man’s ability to make sound decisions. In the
spirit of existence, CARD believes in the empowerment of its members.

Through a group of mutually reinforcing institutions, CARD is dedicated to

empower the poor, particularly the rural poor women, by providing them continued
access and control over financial services.

PRAGMATISM

CARD believes in the pragmatic principles of development such as the

pervasiveness and inevitability of the realities of social, cultural, economic, political, and
environmental changes which simply requires flexibility and adaptability. It believes in
the use of scientific method in dealing with real life problems and the value of learning
from one’s experiences through reflexive thinking.

Specifically, CARD believes in building on its strengths, distinctiveness, and

uniqueness through a framework of good governance via the principle of accountability.
To CARD, what works is effective. To make project of CARD work, CARD instills the
values of mutual trust, mutual benefits, and participatory decision-making and
empowerment through its. Mutual Benefit Association, CARD Rural Bank, Inc., and
Mutually Reinforcing Institutions.

REALISM

25
 In the spirit of Realism that believes discovery of what is true or real serves as a
guide in realistic design and implementation of development programs and community
intervention, CARD serves as a good motivating power to move the landless poor,
particularly the rural women, towards active participation in its microfinance activities.
Through quantifiable and verifiable indicators for the successful implementation of the
microfinance activities of CARD, developmental goals of self-reliance, mutual benefit,
human empowerment, and the quality of life of the Filipino poor are achieved. CARD
envisions building a sustainable financial institution owned, managed and controlled by
landless rural women.

NATURALISM

The aspect of Naturalism may be gleaned from CARD as it recognizes the

incidence of poverty as naturally brought about by the LACK of the following:

a) Entitlement to food and other basic necessities;

b) Access to public provision of economic, social, and human infrastructures;
c) Credit, opportunities for income generation, and
consumption stabilization;
d) Empowerment in both private and public resource allocations;
e) Access to a social safety net and other resources that help households
withstand natural and other shocks, thus safeguarding the very existence of
life and families.

In summary, the philosophical orientations and perspectives gleaned from the

CARD experience may be seen this way:

 The naturalist believes in natural phenomena and laws thereby premising

its developmental activities by considering that the incidence of poverty is
naturally a result of the absence of basic human and economic resources.

 The idealist provides the vision and idealisms to empower the poor rural
women by giving them access to and control over their material and non-
material resources. Consequently, the idealist addresses the problems
posed by the naturalist by coming-up with statements of vision and
mission that serve as its idealisms.

 The realist designs, sets the standards, and identifies the parameters in
the implementation of its developmental programs and interventions.

 The pragmatist ensures the implementation of CARD’s developmental

programs and interventions.

 Finally, the existentialist involves the stakeholders’ participation in

CARD’s developmental activities.

Theoretical Foundations of CARD

26
 CARD’s initiative to establish itself as a microfinance institution can be explained
by Kanter’s Investment Theory (1968). The Investment theory claims that the
commitment directed to an institution is a result of the amount of time, involvement, and
skills invested in it over time. Thus, funding donors of CARD were convinced that it is
worth investing with them because of the initial financial investment they have poured
into CARD’s developmental activities, particularly in their micro-finance projects.

CARD’’s vision to work with the poor sector of society was not by accident, but
was somehow influenced by the Reinforcement Theory by Skinner (1953) as cited by
Fernandez (2001). The theory explains that the commitment to an institution can be
considered as a function of one’s previous history. This means that commitment to a
course of action remains strong if the individual has experienced an earlier success in a
similar situation or if positive outcomes have resulted from such situation over an
intermittent schedule. These outcomes can either have cognitive or non-cognitive
components.

CARD’s positive experience with Grameen Bank in Bangladesh brought its

commitment to the rural poor in the Philippines to liberate them from poverty.

Similarly, the reactions of CARD stakeholders may be explained by the

Expectancy Theory (Staw and Ross, 1978). The theory states that basically individuals
will assess the alternative expected utility. It means that an individual’s commitment is
maintained because his/her previous course of action is higher in subjective expected
utility than the salient alternative.

In the case of CARD, it was able to provide the expected utility. Its membership
has increased because of the spirit of loyalty and commitment of its members. These
were very evident among the stakeholders, both in the field and among the
implementers.

The enormous number of participants exemplified by the increase of annual

membership, as well as attendance to regular meetings, can be explained by the
Democratic Theory which serves as an ideal model for decision making schemes. The
theory envisages a society in which members participate in every aspect of collective
life. It recognizes that people have vast potential capacities in terms of collective wisdom
and intelligence, their basic inclination to be responsible, their interests in civic affairs,
and informed, rational and cooperative decision making. Furthermore, the theory
provides progressive development of these potentials, thereby, giving the democratic
process further impetus and direction for improving decisions. The theory advocates
broad and direct participation of all members of a given social system.

In terms of CARD’s assets and decision making, it can be explained using the
Socialist perspective. This perspective assumes that participating actively and
creatively in the process, and ultimately having some sort of control over economic
forces liberate people.

Dahler and Wilpert argued that participation does not only accomplish the
progressive increase in control of the process by members of the working class, but also
the education and development of workers, which is needed by workers to perform the
tasks originally carried out by managers.

27
 Finally, CARD programs and activities lead to the productivity and efficiency of
the institution. The Theory of Productivity and Efficiency explains the behavior of
human beings and their capacities. People are considered to be manipulated towards
maximum output though appropriate social technologies.

CARD is gifted enough to have the human experts who are authorities and who
understand the plight of the poor. Their governing board and the field workers are
committed to work together toward development of their service area. Apparently, this
attitude is reflective of the Functional Modernist perspectives which are geared
towards the emancipation of the poor from the bondage of poverty. Eventually, this leads
to some intervention to break the vicious cycle of poverty among CARD beneficiaries.
In using these perspectives, there is participatory development in all phases of project
management guided by the principles of Sustainable Development, characterized by
the prudent utilization of financial resources (micro-finance) and ownership of the major
economic forces – labor, capital, marker and income.

III. ANALYSIS ON THE APPROACHES/STRATEGIES USED BY CARD IN THE

CONTEXT OF DEVELOPMENT PERSPECTIVES

Center for Agriculture and Rural Development (CARD) Incorporated is a micro-

finance institution designed to help empower the rural poor, particularly the rural women,
through a sustainable financial scheme that will make them accessible to capital through
borrowing and saving facilities the Center offers. Thus, the object of this critique is to
determine whether indeed CARD is really able to benefit the poor rural women and help
them in alleviating their poverty problems. This can be done by identifying the strengths
and weaknesses of CARD in terms of its mutually reinforcing institutions such as the
CARD NGO micro-finance, CARD MBA, CARD Bank and CARD Training Institute.

To answer this, CARD must be evaluated in the light of sound micro-finance

practices. Such practices include the following considerations:

 prudent adjustment to household savings, investment and repayment

capacities;
 small loan sizes, with ceilings growing over a cycle of repeat loans up to a
level determined by the absorptive capacity of the micro-enterprise and
household economy;
 dynamically growing savings-to credit ratios;
 market rates of interest autonomously determined by financial institutions
and differentiated according to customer needs and differentiated
according to cost and services provided;
 loan maturities and repayment modalities according to customer needs
and differentiated, in case of wholesaling, according to each level of
intermediation;
 short maturities, no grace periods and short installment periods in case of
initial loans;
 insistence on, and incentives for, timely repayment; and
 the development and provision of cost-effective monitoring systems.

28
 CARD NGO MICRO-FINANCE

CARD’s micro-finance program involves three important components of micro-

finance’ success:

Training

CARD’s staff and clients have benefited from the trainings and facilitations they
have conducted. As a result of the trainings, they became better facilitators in
trainings/learning sessions. They developed self-confidence. As to the clients, their
trainings provided them with useful recommendations in handling their respective
businesses.

On the negative side, the training sessions are too tedious to conduct. Moreover,
learning in the trainings must be reinforced through the recitation of the members
CREDO.

Credit

The credit delivery scheme is linked with savings and capital formation, thereby
enhancing the credit worthiness of CARD’s members and contributing to CARD’s
programs sustainability.

CARD also recognizes savings as readily available cheap source of loanable

funds. Thus, this lessens the dependency on too much donor grants.

The problem with credit is when unexpected misfortunes visit CARD’s members.
The rate of repayment slows down and jeopardizes the credit delivery schemes. Much
burden is irrevocably placed upon the poor CARD members. Similarly, amortization rate
is difficult if microfinance activity fails. Thus, the burden again is carried on by the poor
CARD members. Consequently, some CARD members are forced to severe their
connection with CARD, Inc.

Savings Mobilization

CARD subscribes to the view that the poor can save. It also recognizes savings
as a readily available cheap source of loanable funds. Hence, CARD believes that a
strong savings mobilization is essential to the program's sustainability by lessening
dependency on donor grants.

With regards to savings mobilization, CARD has successfully shown that the
poor can save and they can alleviate their impoverished conditions through worthwhile
small scale businesses.

CARD MUTUAL BENEFITS ASSOCIATION INCORPORATED

CARD-MBA is a non-stock, non-profit mutual benefit association formed to

promote the welfare of marginalized women; to extend financial assistance to its

29
members in the form of death benefits, medical subsidy, pension and all loans
redemption package; and to actively involve the members in the direct management of
the association that will include formulation and implementation of policies and
procedures geared towards sustainability and improved services.

The Center for Agriculture and Rural Development Mutual Benefit

Association (CARD-MBA) is the insurance arm of the CARD Mutually Reinforcing
Institutions (MRIs). The CARD MRIs are composed of CARD Non-Governmental
Organization (CARD NGO), CARD Rural Bank and CARD MBA. Ninety-eight (98)
percent of the CARD’s membership is women belonging to socio-economically
disadvantaged sectors.

The strength of CARD’s MBA is in the direct participation and management of its
members. There is no direct competition for membership in the micro insurance market
where CARD operates. It has been rated as number one in terms of clients’ satisfaction.
However, there are two clients’ demands that CARD has still not met: health insurance
and educational assistance. Moreover, MBA is too labor intensive as to monitor its
problems, issues and concerns. It is highly dependent on actuarial risks analysis of
products which may be too theoretical.

CARD BANK

The founding vision of CARD to create a bank owned and managed by landless
rural women has been faithfully kept alive by board members, management staff as well
as its members. It has been a rallying point for the leaders and staff to move forward,
reach more number of poor people and at the same time aim for viability. In the same
manner, the prospect of becoming owners of their own bank has inspired the members
to practice credit discipline. Hence, when the time was deemed ripe, measures were set
into motion towards the realization of this dream.

More than one thousand CARD clients became owners of CARD Bank shares of
certificates, which were awarded on February 14, 2000 on the occasion of the
inauguration of the CARD Training Center in Brgy. Tranca, Bay, Laguna.The clients
proudly held in their hands proof of CARD’s oft repeated promise of a bank owned by
landless poor women.

CARD Bank believes that the poor is a heterogeneous group that has a variety of
financial service needs. Hence it is committed to provide a wide range of services to its
clients including loans, savings and micro insurance.

To meet the loan requirements of its solidarity group members, CARD Bank
offers two loan products, namely the Sikap or regular loan and the Sagip or Emergency
loan. To its more mature borrowers, CARD Bank San Pablo City Branch is pilot-testing
the provision of individual loans. Likewise, Salary Loan to municipal government
employees is being pilot-tested in CARD Bank Marinduque Branch.

CARD Bank subscribes to the view that the poor can and does save. It also
recognizes savings as a readily available cheap source of loanable funds. Hence CARD
Bank believes that a strong savings mobilization is essential to its sustainability by
lessening dependency on donor grants.

30
 Members are required to deposit P20 (US$0.40) a week as their pledged savings
into their Center Fund account. The Center Fund account was previously managed by
the members and utilized for on-lending to members for emergency and educational
purposes. Currently, it can serve as the members’ equity in the Bank if they decide to
purchase shares of stocks or kept as savings, earning not lower than the market rate.
Members of CARD Bank are encouraged to maintain a voluntary (Kayang-kaya) savings
account. As a regulated institution, CARD Bank also accepts deposit from the public.

Based on the CARD’s information background and our meeting with CARD
Training Manager (Mr. Edzel Ramos), it seems like it has addressed the sound
microfinance practices such as small loan sizes, emphasis on forced savings and
responsible, timely credit repayment, differential repayment modalities according to the
capacity to pay through SIKAP AND SAGIP loans, and prudent adjustment to household
savings, investments and repayment capacities. It is a bank that demands no collateral,
thereby insuring the poorest of poor can avail of its financial services and capital to start
small businesses to alleviate their impending and endemic poverty.

CARD TRAINING INSTITUTE

Training has been an integral part of CARD’s assistance both for staff and
members of the program. Over the years, CARD was able to develop a technology
which further supports the worldwide belief that poor people has to have their own share
in the upliftment of their own economic status and quality of life. In this aspect, CARD
believes that development can only be realized through a combination of an effective
community organizing approach and a highly sustainable savings and credit program.

CARD’s Training Program and Activities revolved around the strategies that
CARD utilizes and has proven in the field of microfinance operations. Thus, the major
activities being carried-out in the implementation of the Credit and Savings methodology
in effect become its training offerings. The training contents and methods are designed
to assist participants, donor agencies, non-government agencies, peoples’ organization
and or government agencies to replicate the same credit and savings program in their
own areas, or program after participating in the following series of courses.

CARD is committed to take its part in eradicating poverty in the Philippines as

expressed in its mission statement. With its proven technology in the field of savings and
credit program, the Training Department is actively doing its share in the dissemination
of its technology not only to its members but to other NGOs, MFIs, coops and banks.

CARD's conduct and delivery of training courses is unique. It is practitioner led

whereby only proven technologies and well-tested systems and procedures are shared
during the training by CARD's most experienced and competent directors and staff.

In addition, it provides ample opportunities for hands-on learning in actual

branches and areas covered by its microfinance operations.

This is a 2 to 3 days orientation designed for microfinance staff which aims to

provide participants a thorough orientation and exposure on CARD's GBA operating

31
systems and procedures. The lectures are complemented by field exposure to branches
and centers.

Under this program course, participants are expected to acquire basic

knowledge, skills and positive attitude towards the application of basic principles in
Grameen Banking System into their own microfinance or GBA operations. The course is
conducted such that practical inputs acquired from experience are shared by
practitioners who are mostly CARD's directors and staff in order to substantiate any and
all theoretical inputs that may be shared and asked by the participants.

 Managing Rural Microfinance Program

 Basic Trainer’s Training on Team Building and Value Formation.
 Basic Financial Management
 Creating and Maintaining Strong Credit Discipline.

This is a two-three day sharing of how actually CARD as an NGO evaluated and
planned the establishment of CARD Bank, and how exactly the CARD Bank has
complied with all the requirements and regulations of the Bangko Sentral ng Pilipinas.
This is an exciting course for everyone especially NGOs and MFIs who are dreaming to
establish their own bank in the future. The course is designed for high ranking officers
and Board of Trustees/Directors of the institution.

Special/Customized Courses and Study Tours. The CARD Training Center, at any
time, can prepare for any special or customize training course for any bank,
microfinance institution, NGO or cooperative that will suit their unique, individual needs
and concerns regarding microfinance development and or expansion. It has, in fact,
conducted a month-long training and exposure with __ MFIs from Central and Latin
America which was sponsored by the Grameen Foundation USA in August-September
2001.

In summary, the CARD Training Center has adapted effective and well-tested
systems and procedures in dealing with microfinance institution shared by CARD's most
experienced and competent directors and staff. It has designed special/customized
courses and study tours that emphasize the importance of microfinance activities.

However, CARD has been remised in developing gender sensitive trainings that
equally focus on rural men and women. Moreover, CARD has not yet implemented its
plan to address the urban poor particularly in terms of trainings.

Does CARD alleviate poverty among its members?

As CARD has envisioned to empower its members to build a sustainable

financial institution owned and managed by them, we can conclude that it has
significantly made a dent in improving the quality of life of the poor rural women. It has
viably implemented its CARD NGO microfinance, CARD Bank, CARD MBA and CARD
Training Institute anchored on the Grameen approach. It has fostered accountability and
teamwork by requiring group members to mutually guarantee each others’ loans and

32
become responsible for repayment of their members. It has reached the poorest of the
poor by requiring no collateral, but it has required mandatory monthly meetings for
building self esteem and for enforcing discipline among each members. However, the
present developmental strategies that CARD employs can still be improved by providing
a better way of monitoring and evaluating its mutually reinforcing institutions. Sound
monitoring and evaluating schemes of the MRIs are very crucial if sustainability if to be
achieved. The evaluation and monitoring schemes will ensure whether the objectives
set by CARD are met. Lessons learned from the experiences of other microfinance
institutions can always be considered if CARD wishes to avoid risks in ensuring
sustainable microfinance activities. In the light of

IV. ISSUES AND LESSONS LEARNED FROM THE CARD CASE

Choice of Case Study

The NGO institution chosen by the group is a perfect example of a successful

microfinance program in the Philippines considering the plenty of microfinance and
micro-enterprises programs reported to be suffering from loss and bankruptcy. The
experiences and success stories of the beneficiaries as shown in the video footages are
worth emulating and replicating in other parts of the country.

It is also very unique in the Philippines as 90% of the CARD beneficiaries are
women, a principle they have followed from the Bangladesh experience where women
profited from GRAMEEN Bank. The issues from other Asia Pacific countries that
Grameen model is not beneficial to the poor people have raised a lot of criticisms
specially abroad. This saucy development rumor did not escape critical thinking of
Filipinos and became object of debates and arguments in the CED 301 class; however,
as class visited the place and listened to testimonies of some women beneficiaries
coupled with authentic CARD accomplishment reports, somehow such negative
criticisms have been dispelled.

Does micro-enterprise help in alleviating poverty ?

An interesting paper by Khandker (2001) presents opposing research results of

studies done in Bangladesh on the issue of whether indeed micro financing benefits the
poor or not. In this paper, Khandker reviewed several studies and presented
countervening results of different researchers on the topic of benefits of microfinance.
According to his studies, the works of Hossain, (1988) indicated that Grameen Bank has
supported the poor, especially women in terms of employment, income generation and
social indicators. Other studies mentioned to support the positive benefits of micro
financing for the poor are those of Rahman ( 1996 ); Hashemi, Schuler and Riley
( 1996 ) and Hashemi (1994 ). A more comprehensive study that shows causality
between financing program and positive benefits generation was that of Khandker
(1998) and Pitt (1999). The findings of these studies suggest that financing program
helps in building assets and net worth of the poor as well as provide benefits to women
by way of asset acquisition of their own and the exercise of power in household decision
making.

33
 However, Khandker (1998) also referred to the study of Morduch( 1998) where it
was claimed that there was nonexistent or small impact of financing program on the
poor. Morduchn argued that the results of Khandker and Pitt’s study over estimated the
benefits of micro finance and that Grameen Bank’s program produced marginal benefits
to help the poor.

Pitt (1999) made another study on the methodology used by Morduch and
concluded that the methodology indeed underestimated the program benefits thus
Morduch concluded that Grameen Bank’s Programs had little or no effect on the poor.
Pitt proceeded to show that the original positive projections of benefits to the poor were
well founded.

These findings are indispensable and are inspiring to development practitioners

and workers. They are issues and concerns that require re-visitation and reassessment.

Gender Dimension of Poverty

While nearly two thirds of the world’s poor are in the Asian and Pacific region,
two-thirds of the region’s poor are women. Poverty is particularly acute for women living
in the rural areas.

In poor families, the gender division of labor and responsibilities for household
welfare, mean that the burden of poverty falls most heavily on women. Given gender
disparities in education, health care, economic participation, and incomes, women are
the most vulnerable category.

The increasing feminization of poverty is now a well recognized trend. It has

intensified with the recent Asian crisis, where adjustment programs tend to exacerbate
women’s hardships, and in the economies of transition as a short consequence of
political, economic and social transformation. Improving the political , legal, cultural,
economic and social status of women is thus pivotal to escaping the poverty trap. This is
most evident in the case of CARD’s microfinancing scheme.

Sharma ( 1999) explains that small and medium scale enterprises focus their
operations on profit while micro-enterprises focus their operations on survival. Micro-
enterprises are largely concentrated in low income and low productivity areas. Women
often are the ones that contribute to family income by engaging in micro enterprises.
Such enterprises include provision of stores, craft and handicrafts and other services.
They are usually home based due to their family responsibilities and belief in traditional
ways. Their activities are focused in things that are easy to operate, require very little
capital and possibly little efforts.

a. Empowerment of Women:

Empowerment of women happens when they engage in micro enterprise

because they become managers in their own way. They gain access to information
through interaction with other people who come to buy from them. Some of this
information, become the lead to further development and expansion of their
entrepreneurial activities, while others may lead to improvement of their status in the
society. Such awakening may lead to more education, awareness and participation in
other social and economic activities. It could lead to making their own decisions about

34
matters that generally are the domain of men such as household investments, asset
accumulation, transfer of home and matters pertaining to education and career of
children. Women’s participation in micro enterprise activities highlights their role and
gives recognition to their participation in generating cash for pressing needs of the family
thereby giving not only empowerment but also elevating their status equal to their
partners and spouse.

b. Poverty Reduction :

One of the most important contributions of women through micro-enterprises is

increasing income of the poor households. Micro-enterprise contributes in enhancing
the role of women in development and reducing poverty. Poor households depend
excessively on a single occupation. Micro-enterprises supplement income and
contribute to the well being of the family. Their involvement of women in micro-
enterprises highlights and gives recognition of their participation not only in domestic
income saving activities but also earning an extra income for the household.
Households have a variety of pressing basic needs and emergencies like sickness,
repair, of house and education of children that need immediate cash. Poor households
have difficulty in meeting the various needs with their slender budget which are taken
care through women’s participation in micro enterprises.

c. Employment Generation :

Micro-enterprise is labor intensive requiring very little capital and generating

employment. Generally, each unit generates between two and ten jobs usually for family
members, relatives and neighbors. The creation of employment opportunities depends
on the type of the product or service, the location of the enterprise, the necessary
management skills, the quality of product or services and host of other aspects. New
enterprises create over 60 percent of the jobs while the remaining 40 percent are
generated through expansion and diversification.

d. Influencing Factors:

Why do some women initiate business while others in similar circumstances do

not ? Some of the very common inter linked variables that intervene in the process of
deciding to create a new enterprise are : life path changes, perception of desirability and
perceptions of feasibility.

Positive pull factors such as the influence of a partner, investor or customer play
a very crucial role in making decisions. Social and cultural factors in particular value
systems, influence the formation of entrepreneurial events. More specifically, when high
value is placed on entrepreneurship of all kinds more individuals may choose to embark
upon independent business; in other words, when behavioral characteristics such as
innovativeness, self motivation, risk taking and self reliance are regarded positively one
may expect a high percentage of entrepreneurs in micro enterprises (Sharma, 1999).

IV. Guidelines and Recommendations in Formulating Developing

Interventions/Strategies and Approaches

35
 As learned from the CARD experiences sound micro-finance practices are
essential for viability of microfinance institution and for a sustained increase in their
service outreach. These practices include the following considerations:

 prudent adjustment to household savings, investment and repayment

capacities;
 small loan sizes, with ceilings growing over a cycle of repeat loans up to a
level determined by the absorptive capacity of the micro-enterprise and
household economy;
 dynamically growing savings-to credit ratios;
 market rates of interest autonomously determined by financial institutions
and differentiated according to customer needs and differentiated
according to cost and services provided;
 loan maturities and repayment modalities according to customer needs
and differentiated, in case of wholesaling, according to each level of
intermediation;
 short maturities, no grace periods and short installment periods in case of
initial loans;
 insistence on, and incentives for, timely repayment; and
 the development and provision of cost-effective monitoring systems.

Recommendations

Training

First and foremost, a Training Needs Analysis (TNA) should be worked out
critically ensuring that trainings and seminars provided would be beneficial. Since the
members are involved with small-scale industries, corresponding skill development
specially quality production should be implemented.

The principle of extending assistance should not only end after the release of
loans. Although trainings are provided, specificity of purpose is very crucial. Say, if the
loan will be used for furniture production, swine raising, duck cum egg, weaving, and
others, it should be ensured that corresponding skills will be developed through
trainings. If she has skills and capital then, the better is her chance to a quality life.

Although at present there are a lot of trainings provided to the beneficiaries, the
sessions are too tedious to conduct. There is a need to simplify the modules to give
ease and easy grasp methodologies. There is also a need to reinforce the CARD’s
CREDO by reciting it regularly every meeting and other social gatherings. This would
help the members internalize more their roles.

Credit

There must be adjustment when it comes to interest rate. A longer grace period
should be provided to give allowance for incidental problems. It should bear the
principle that microfinance is created for the most needy and indigent, therefore a little
consideration must be accorded to the poor, say a month or two grace periods.

36
Saving Mobilization

There must be scheme for the laderized or progressive saving which means that
as the small scale industries income gets higher the savings of 20.00 per week should
be increased. In other words, it depends on the member’s income and capacity to save.
The higher her contribution the higher amount she can borrow and the more possible
she can venture into industries.

Monitoring and Evaluation

Evaluating development projects is very crucial if sustainability is to be achieved.

They would ensure whether the objectives set by the bank (CARD) are met. This would
also give an indication to the bank on the capability of women to pay loans. The risk of
loss during project implementation will be corrected immediately. Through evaluation,
the bank could decide the future of the clients’ next loaning whether to approve or
disapprove the loan application.

CARD information dissemination

Micro Financing Institution like CARD is one of the very few MFIs in the
Philippines, but unlike Small and Medium Enterprises (SMEs) which has already
succeeded in forming a policy that lead to the creation Magna Carta of Micro Enterprises
(RA 6977), micro enterprise development has small institutional and legal support yet.

Strategies : CARD should have some strategies on disseminating information

which may be in the form of media mileage and linking up with other loaning
institution like the Small and Medium Enterprise Development Council (SMEDC)
of the Philippines so that CARD would be more nationally acknowledged and
replicated in other banks.

Also, future researches and studies should be conducted on the

success and development of micro enterprises in terms of their socio- economic
impact which may also lead to policy formulation and ultimately creating it into a
law.

37
 References

http://www.cardbankph.com/

http://www.oneworldonepeople.org/articles/World%20Poverty/Grameen.htm Oct 2, 2004

http://www.grameen-info.org

http://www.oneworldonepeople.org/articles/World%20Poverty/Grameen.htm Oct 2, 2004

World Poverty & the Final Solution: Part 4 of Volunteering in Calcutta, India, 10
November 2000

Source: 'Banker to the Poor: The Story of the Grameen Bank' & Grameen Bank.

'Banker to the Poor: The Story of the Grameen Bank' by Muhammad Yunus.

© One World One People for Peace, 29 October 2003

This Web page may be linked to any other Web sites. Contents may not be altered

http://www.oneworldonepeople.org/articles/World%20Poverty/Grameen.htm Oct 2, 2004

ADB. 2002. “ The Challenge of Poverty Reduction “, http://www.ad.org

38
Hashemi, M., Sidney Schuler and Ann Riley, 1996 . “Rural Credit Programs and
Women’s Empowerment in Bangladesh” , World Bank , vol. 24, pp 635-53

Hossain,M. 1988. “ Credit for Alleviation of Rural Poverty: The Grameen Bank in
Bangladesh.” IFPRI Research Report 65, IFPIR, Washington, D.C.

Khandker, S. 2001. “ Does Microenterprise Really Benefit the Poor?”, A Paper delivered
at the Asia and Pacific Forum on Poverty: Reforming Policies and Institutions for
Poverty Reduction, ADB, Manila. Feb, 2001

Morduch, J. 1998. “ Does Microfinance Really Help the Poor ? New evidence from
Flagship Programs in Bangladesh”. Unpublished mimeo.

Ashita Sharma , The Kathmandu Post Editorial, 23rd March 1999

http://www.panasia.org.sg/nepalnet/economics/genderin.htm

Appendix A

Listing of Awards/Citation of CARD

 CARD was given Plaque of Recognition and Appreciation by the Peoples Credit
and Finance Corporation on September 14, 2003 for having successfully
extended microfinance services to 110,798 clients.

 CARD Bank was awarded the Plauqe of Recognition on December 4, 2001 by

the Peoples Credit and Finance Corporation, Asian Development Bank and
Associated Resources for Management, Inc. (ARMDEV) for presenting its
winning strategies during the Grameen Bank Approach Replicators Managers'
Conference.

 CARD was awarded the FLAME OF EXCELLENCE AWARD on October 17,

2000 by the Coalition for Microfinance Standards in recognition of its outstanding
performance and attaining level of excellence at par with the Microfinance
Performance Standards.

39
  CARD was first runner-up for EXCELLENCE AWARD conferred by the Grameen
Foundation in New York, U.S. A. on October 30, 2000.

 On the Occasion of the 50th Anniversary Celebration of the Catholic Relief

Services (CRS), CARD was the recipient of the OUTSTANDING
COUNTERPART AWARD on October 26, 1995.

 CARD was given Plaque of Appreciation by the Presidential Management Staff

on July 7, 1990 in recognition of its support, participation and cooperation to the
program and projects of the presidential Social Fund and for its commitment to
serve the people in partnership with the government.

Appendix B

CARD NGO Branch Offices

Quezon II Area
Atimonan Gumaca
Doña Aurora St., Zone I, Atimonan, Quezon Brgy.Rosario, Gumaca, Quezon
Tel. No. 042-511-1440 Tel. No. 042-317-7382
Mylene Basco, Branch Manager Adora Escarez, Branch Manager

Calauag
Tagkawayan
1081 Quezon St., Brgy. Dos, Calauag,
Brgy. Poblacion, Tagkawayan, Quezon
Quezon
Tel. No. 042-304-8375
Tel. No. 042-301-8170
Shielo Kampitan, Branch Manager
Amalia Recohermoso, Branch Manager

Lopez Quezon, Quezon

San Isidro St., Brgy. Talolong, Lopez, Quezon SANTELCOR BLDG., Quezon, Quezon
Tel. No. 042-841-1920 Tel. No. 042-392-1006
Hydeliza Atienza, Branch Manager Edison Reyes, Branch Manager

40
Quezon III Area
Mulanay Catanauan
Brgy. 4, San Carlos cor. Rizal St., Mulanay, M.H. del Pilar St., Brgy. 2, Catanauan,
Quezon Quezon
Tel. No. 042-319-7390 Tel. No. 042-315-8253
Jowie Guevarra, Branch Manager Roderick Marudo, Branch Manager

San Francisco
San Narciso
Don Queblan, Purok 1, Poblacion San
Maligaya, San Narciso, Quezon
Francisco, Quezon
Tel. No.
Tel. No.
Diomedes Alvarez, Branch Manager
Alejandro Ilagan, Branch Manager

Buenavista
KGG. Gawa St. Poblacion, Buenavista, Quezon
Tel. No.
Catalino del Mundo, Branch Manager

Quezon IV Area
Infanta Real
20 de Julio, Infanta, Quezon Poblacion I, Real, Quezon
Tel. No. 042-535-3841 Tel. No. 042-536-6301
Louie Silvestre, Branch Manager Mauricio Maur, Branch Manager

Siniloan Famy
L. de Leon St., Siniloan, Laguna Brgy. Batuhan, Famy, Laguna
Tel. No. 049-813-1292 Tel. No. 049-813-1296
Marites Pedraja, Branch Manager Patricia Gillado, Branch Manager

Sta.Maria
Real Velasquez, Sta Maria, Laguna
Tel. No. 049-269-2422
Joy Guiron, Branch Manager

Quezon V Area
Lucena Pagbilao
Gulang-Gulang, Lucena, City Brgy. Castillo, Pagbilao, Quezon
Tel. No. 042-660-5737 Tel. No. 042-731-3502
Maridel Capistrano, Branch Manager Medelyn Katigbak, Branch Manager

Padre Burgos Unisan

Poblacion, Padre burgos, Quezon F. de Jesus, unisan, Quezon
Tel. No. Tel. No. 042-549-8402
Madonna Bautista, Branch Manager Dondon Mercado, Branch Manager

Macalelon
Brgy. Pinagbayanan, Macalelon, Quezon
Tel. No. 1981-209 loc. 4034
Florife Reynido, Branch Manager

41
Mindoro I Area
Calapan North Calapan South
Km. 5, Sta Isabel, Calapan City, Oriental Mindoro Bayanan II, Calapan City, Oriental Mindoro
Tel. No. 043-286-9051 Tel. No.
Juvy Gacutan, Branch Manager Amafe dela Rosa, Branch Manager

Puerto Galera
San Teodoro
Brgy. Pobalacion, Puerto Galera, Oriental
Poblacion, Baco, Oriental Mindoro
Mindoro
Tel. No.
Tel. No. 043-287-3352
Nemie Mendoza, Branch Manager
Juliana Mendoza, Branch Manager

Mindoro II Area
San Jose North San Jose South
Liboro St., Brgy. Pag-asa, San Jose, Occidental Liboro St., Brgy. Pag-asa, San Jose,
Mindoro Occidental Mindoro
Tel. No. 043-491-1449 Tel. No. 043-491-1449
Leonida Mendoza, Branch Manager Ghina Reyes, Branch Manager

Magsaysay
Calintaan
Quezon St., Poblacion Magsaysay, Occidental
Sto. Niño, Rizal, Occidental Mindoro
Mindoro
Tel. No.
Tel. No.
Desiree Cudanin, Branch Manager
Venus Celestre, Branch Manager

Rizal
Sto. Niño, Rizal, Occidental Mindoro
Tel. No.
Remelyn Robles, Branch Manager

Mindoro III Area

Victoria Gloria
Poblacion I, Victoria, Oriental Mindoro Jarabe St., Gloria, Oriental Mindoro
Tel. No. 043-4500-358 Tel. No.
Rizaline Manalo, Branch Manager Velnie Mojica, Branch Manager

Pola
Socorro
San Isidro, Brgy. Maluanluan, Pola,
Zone II, Socorro, Oriental Mindoro
Oriental Mindoro
Tel. No. 043-284-5006
Tel. No.
Domingo Romasanta Jr., Branch Manager
David Burgos, Branch Manager

Naujan
Barcenaga Naujan, Oriental Mindoro
Tel. No. 043-208-3995
Luzviminda Albor, Branch Manager

Mindoro IV Area
Sablayan Mamburao
Gozar St., Buenavista, Sablayan, Occidental Rizal St., Mamburao, Occidental Mindoro

42
Mindoro
Tel. No. 043-711-1751
Tel. No.
Ludrigo Gregorio, Branch Manager
Raymond Quilit, Branch Manager

Sta Cruz Abra de Ilog

Poblacion I, Sta Cruz, Occidental Mindoro San Isidro St., Poblacion, Occidental
Tel. No. Mindoro
Florante Andaya, Branch Manager Tel. No.
May Sorisantos, Branch Manager
Bicol I Area
Libmanan
Sipocot
Lerma St., Taban, Libmanan, Camarines
District Hospital Road, Sipocot, Camarines Sur
Sur
Tel. No. 054-450-6439
Tel. No. 054-511-9109
Ma. Ana Toledo, Branch Manager
Rosario Rañola, Branch Manager

Pasacao
Pili
Brgy. Sta Rosa del Norte, Pasacao, Camarines
Brgy. San Vicente, Pili, Camarines Sur
Sur
Tel. No. 054-471-4386
Tel. No. 054-513-9466
Alina Año, Branch Manager
Raquel Zaragosa, Branch Manager

San Fernando Bula

Brgy. Bonifacio, San Fernando, Camarines Sur Brgy. Bagumbayan, Bula, Camarines Sur
Tel. No. 054-477-5244 Tel. No. 054-455-2618
Norberto Nieban, Branch Manager Caressa Ramirez, Branch Manager

Bicol II Area
Calabanga GOA
San Vicente, Calabanga, Camarines Sur #558 P. Panday St., Goa, Camarines Sur
Tel. No. 054-470-1669 Tel. No. 054-453-2005
Jhoanna Cordero, Branch Manager Rona Reyes, Branch Manager

Tinambac
Minalabac
Zone IV, Sta Cruz, Tinambac, Camarines
Brgy. San Francisco, Minalabac, Camarines Sur
Sur
Tel. No. 054-470-1669
Tel. No. 054-255-8011
Samuel Tumbado, Branch Manager
Alvin Villamena, Branch Manager

Ocampo Tigaon
Poblacion West, Ocampo, Camarines Sur May-Anao, Tigaon, Camarines Sur
Tel. No. 054-452-0011 Tel. No. 054-452-3924
Daisy Loquinario, Branch Manager Luz Bonavente, Branch Manager

Laguna III Area

Sta Cruz Paete
Cailles St., Sta Cruz, Laguna M.H. del Pilar St., Paete, Laguna
Tel. No. 049-808-6216 Tel. No. 049-557-0177
Solomon Aramil, Branch Manager Renzelle Andreus, Branch Manager

43
Pagsanjan Lumban
Villa Guadalupe Subd., Soriano St., Maulawin, General Luna St., Brgy. Primera Parang,
Pagsanjan, Laguna Lumban, Laguna
Tel. No. 049-808-6460 Tel. No. 049-808-6233
Aurea Magpantay, Branch Manager Myrna Guevarra, Branch Manager

Magdalena

Tel. No. 049-255-2577

Glenda Baldoza, Branch Manager
Masbate II Area
Cawayan Aroroy
Poblacion, Cawayan, Masbate Poblacion, Aroroy, Masbate
Tel. No. 052-820-6556 Tel. No. 056-421-5488
Lourdes Quilaton, Branch Manager Ronnie Lancetas, Branch Manager

Baleno
Albao St., Baleno, Masbate
Tel. No.
Erasto Panes, Branch Manager

Appendix C

EXECUTIVE OFFICERS

Dr. Jaime Aristotle B. Alip

Chairman
Ms. Dolores M. Torres
President
Ms. Lorenza dT. Bañez
Treasurer
Ms. Ma. Luisa P. Cadaing
Director
Dr. Gilberto M. LLanto
Director

44
Ms. Gloria A. Andeza
Director
Ms. Silveria S. Arciaga
Director

Ms. Dolores M. Torres

President and CEO
Ms. Lorenza dT. Bañez
Executive Vice President, Finance
Mr. Aristeo A. Dequito
Vice President, Operations
Ms. Cynthia B. Baldeo

Assistant Vice President

Ms. Marivic M. Austria
Internal Auditor/Compliance Officer
Mr. Edgar V. Cauyan
IT Director
Ms. Odette B. Dijan
General Accountant
Atty. Edgardo Marilim
Corporate Legal Counsel

Appendix D

MONOGRAPHS

Monograph 1

CARD’s Transformation: Poor Landless Women’s Vehicle to Empowerment, 1999. 24

pages
By Dr. Jaime Aristotle B. Alip, PhD CARD Founding President and Chairman of the
Board

On September 1, 1997, in San Pablo City, CARD Rural Bank opened its doors to the
public, becoming the first microfinance NGO in the Philippines to transform itself into a
bank. This case study traces CARD’s transformation process, examines the rationale for
transformation, identifies enabling factors and lists key issues and challenges.

Monograph 2

45
The CASHPOR House Index and Asset Test As Adapted by the Center for Agriculture
and Rural Development (CARD, Inc.), 1999. 37 pages
By Dolores M. Torres, CARD Bank President and CEO

With CARD’s transformation into a regulated financial intermediary, there was concern
that further commercialization could result in mission drift, i.e reduced focus on reaching
the poorest. This paper describes how CARD adapted the CASHPOR House Index and
the Means Test as a client targeting and screening tool, respectively, ensuring that it
does not stray from its original focus.

Monograph 3

Managing MIS in a Fast Growth MFI: The Experience of CARD, Inc., 2001. 20 pages
By Lorenza dT. Bañez, CARD Executive Vice-President

With the creation of the CARD Rural Bank, there emerge a need to strengthen its MIS by
installing systems and procedures that will ensure the effective and efficient delivery of
quality service and products. CARD Bank hired professional information technologists to
help develop a management information system that will increase the bank’s efficiency,
thus no longer will clients wait in long lines to place their deposit or pay back their loans.
This paper recounts CARD’s experience in redesigning its MIS and how the changes
helped the institution to manage its growth and expansion.

Monograph 4

Reaching the Poor with Effective Microcredit: Evaluation of a Grameen Bank Replication
in the Philippines, 1997. 34 pages
By Mahabub Hossain and Catalina Diaz

One hundred thirty three clients, representing old and new borrowers from 3 CARD
branches were interviewed to assess the economic impact of CARD’s financial services.
Client situations were compared based on information on credit history of the borrowers,
their socioeconomic background and asset holding, costs and returns on enterprises
financed with the loan, employment and incomes generated from CARD-financed and
other economic activities of the household. This paper discusses the findings of the
study, concluding that CARD has been effective in improving the livelihood of the low-
income households.

Monograph 7

Summary Report of the Findings from the CARD/FFH Client Assessment Techniques
Workshop, 2002, 28 pages
By Barbara MkNelly and Aniceta Alip

The workshop on Client Assessment Techniques aimed to build the Masbate staff skill
and capacity to systematically solicit client information through focus group and short
survey and to analyze the operational implications of this information. The workshop was
undertaken as part of CARD and Freedom from Hunger’s collaborative work to build
staff capacity and test approaches for assessing progress toward social as well as

46
financial goals. Three specific operational issues were explored through client interviews
and staff analysis.

Appendix E

Grameen Micro-Credit & How to End Poverty from the Roots Up

By Paul Sinclair (One World One People for Peace) 29/10/03

"Unleashing of energy and creativity in each human being is the answer to poverty."
Professor Muhammad Yunus.

Professor Muhammad Yunus was a highly respected Head of the Economics

Department at Chittagong University, Bangladesh.

In 1974 a terrible famine gripped Bangladesh and skeleton like people began to flood
into the capital Dhaka. This caused Professor Yunus to feel empty inside. He used to get
excited about teaching how economic theories provided answers to economic problems

47
of all types. But what were the use of theories when all around him, people were dying of
starvation. Where did poverty fit into the economics equations?

So Professor Yunus decided to take a ‘worms eye view’ of a local village – Jobra, so he
could learn about village life in person. The Poor would become his teachers and the
village his university of the real world.

One day he met an impoverished single mother of three named Sufia Begum, working to
weave bamboo stools, morning to night whilst living in utter destitution.

“Do you own this bamboo?” he asked her.

“Yes”.

“How do you get it?”

“ I buy it.”

“ How much does the bamboo cost you?”

“5 Taka” (22 cents US).

“Do you have 5 Taka?”

“No, I borrow it from the Paikars.”

“The middlemen?” he asked. “What is your arrangement with them?”

“I must sell my bamboo stools back to them at the end of the day so as to repay my loan.
That way what is left over to me is my profit"

“How much do you sell it for?”

“Five Taka and 50 Paisa.”

“So you make 50 Paisa profit?"

She nodded. That came to a profit of just over 2 US cents.

"And could you borrow the cash and buy your own raw material?"

"Yes but the money lender would demand a lot. And people who start with them only get
poorer."

“How much do the money lenders charge?”

“It depends. Sometimes they charge 10 percent per week. I even have a neighbour who
is paying 10 percent per day".

“And that is all you earn from making these beautiful bamboo stools, 50 Paisa?

48
“Yes.”

The Professor watched as Sufia set to work again, because she did not want to lose any
time, her small brown hands plaiting the strands of bamboo as they had every day for
months and years on end.

He had never heard of someone suffering so much for the lack of 22 US cents. The
Professor thought Sufia’s status as virtually a bonded slave was never going to change if
she could not find that five taka to start with. Credit could bring her that money. She
could then sell her products in a free market and she could get a much better spread
between the cost of her materials and her sale price.

The next day he had a list made of how many people in Jobra, like Sufia, were
borrowing from traders and missing out on what they should have been earning from the
fruits of their labours.

Forty-two people had in total borrowed 856 taka (a total of less than $US 27). “My God,
my God, all this misery in all these forty-two families all because of the lack of $27!” he
exclaimed.

The Professor lent them $27 and said they could repay him whenever they could afford
to. Over the next week, it struck him that what he had done was not sufficient because it
was only a personal and emotional solution. He had simply lent $27 but what he had to
do was to provide an institutional solution.

So the Professor and his colleagues did just that. Today Grameen Bank has 1,190
branches. It works in 43,258 villages and has 2.9 million borrowers who own 93% of the
Bank. It just recently passed the $US 4 Billion mark in loans to the poor.

Its borrower repayment rate stands at 99.08 percent and Grameen Bank is 90% Self-
Reliant. Meaning that 90% of the funds it has lent out come from its own fund and from
the savings of its depositors.

Some of the key features of Grameen Credit are that Borrowers don't need to prove how
much wealth they have, they need to prove how poor they are and how little savings
they have. The whole system works because it is the only opportunity they have to break
out of their poverty; they don’t have any cushion whatsoever to fall back on. If they fall
foul of this one loan how will they survive? The Poorest people are afraid of everything
so they want to work hard and do a good job because they have to. They don't have a
choice.

Grameen believes that charity is not an answer to poverty. It only helps poverty to
continue. It
creates dependency and takes away each individual's initiative to break through the wall
of poverty. Unleashing of energy and creativity in each human being is the answer to
poverty.

© Grameen Communications

49
There is no legal instrument between the lender and the borrower. Grameen considers
its relationship to be with people, not with papers. They build up a human relationship,
based on trust. Grameen succeeds or fails depending on how strong their personal
relationship is with the borrowers.

Their experience with bad debt is less than 1%. Even then Grameen does not conclude
that a defaulting borrower is a bad person. Rather that their personal circumstances
were so hard that they could not pay back their tiny loan. Bad loans of 0.92 percent is
seen by Grameen as the cost of doing business and it also represents to them a
constant reminder that they need to improve in order to succeed.

Grameen has discovered Micro-Credit (based on their tried and tested program) is a
very effective instrument to empower the poor, particularly the poor women, in all
cultures and economies of the world. It is cost-effective, sustainable and works in a
business-way. It gives a poor person a chance to take their own destiny into their own
hands and get out of poverty with their own efforts.

According to a recent internal survey, 46.49% of Grameen borrowers' families have

crossed the poverty line. To do this according to Grameen's Bangladesh rural poverty
line criteria, they must have a rainproof house, a sanitary toilet, clean drinking water and
the ability to repay 300 Taka ($8) a week. Also all children of school age must be in
school and each household must eat three meals a day and have access to regular
medical checkups.

The life story of Ammajan Amina, one of Grameen's first borrowers illustrates what
micro-credit can do for a street beggar. Of her six children, four had died of hunger or
disease. Only two daughters survived. Her husband who was much older than her was
ill. For several years he had spent most of the family assets on trying to find a cure.

After his death all that Amina had left was the house. She was in her forties, which is old
by Bangladesh standards, she was illiterate and she had never earned an income
before. Her in laws tried to expel her and her children from the house where she had
lived for the 20 years, but she refused to leave.

She tried selling home made cakes and biscuits door to door, but one day she returned
to find her brother-in-law had sold her tin roof and the buyer was busy removing it. Now
the rainy season started and she was cold, hungry and too poor to make food to sell. All
she had she used to feed her own children.
Because she was a proud woman, she begged but only in nearby villages. As she had
no roof to protect her house, the monsoon destroyed her mud walls. One day when she
returned, she found her house had collapsed and she started screaming: "Where is my
daughter? Where is my baby?" She found her older child, dead under the rubble of her
house.

When Professor Yunus's colleague Nurjahan met her in 1976 she held her only surviving
child in her arms. She was hungry, heartbroken and desperate. There was no question
of any money lender much less a commercial bank giving her credit. But with small loans
she started making bamboo baskets and remained a borrower to the end of her days.
Now her daughter is a member of Grameen.

50
Today Grameen has more than three million such life stories, one for each of their
members.

If you are interested in learning more about with Grameen Bank they can be contacted
through:

Professor Yunus has also written a book on Grameen Bank and his experiences of
starting it called 'Banker to the Poor: The Story of the Grameen Bank'. It provides deep
insights into World Poverty, the limitations of commonly used Third World Development
Policy as well as current economic theory's failings to account for poverty. His book
provides constructive solutions to all of this, written in an easy and absorbing way. It is a
must for anyone who wants to understand why most of the world's population live in
poverty and what can be done to rid the world of it.

51