USAID, RestartME Foundation work with leading MFIs in the Philippines to disburse Php40M loans for Microentrepreneurs
By Melinda Gabuya
Restart Micro-Enterprise Inc. (RestartME) with funding from USAID and in partnership with Chemonics International is working with ASA Philippines Foundation, Center for Agriculture and Rural Development Inc. (CARD Inc.), Negros Women for Tomorrow Foundation (NWTF), and Taytay sa Kauswagan Inc. (TSKI) in the disbursement of the Php40 million Covid-19 Loan (C-19) Fund under Revive MFI-Ph Project.
The four partner microfinance institutions (MFIs) of Revive MFI-Ph Project were chosen based on their credit rating which exceeded 70% based on the assessment of RestartMe. The disbursement of the C-19 Fund began in February 2021 and the full amount was disbursed a month later in March with each MFI receiving Php10 million each.
A total of 3,354 microentrepreneur sub-borrowers from 30 MFI branches were identified as recipients of the C-19 Fund. TSKI had the most number of branches totaling 11 branches in Iloilo province, followed by ASA with 10 branches in Bulacan, CARD with 5 branches in Cebu, and NWTF with 6 branches in Iloilo.
Empowering Women Microentrepreneurs amid COVID-19 Pandemic
Of the total C-19 loan recipients, 3205 (96% ) are women with a total loan amount of Php38.2 million while 149 (4%) are men having a total of Php1.8 million loan amount. Majority of the recipients are engaged in trading, enterprise, wholesale, and retail; food and accommodation; and agriculture and fisheries.
According to a report by RestartME, the monthly household income of sub-borrowers across the four MFIs were badly affected by the pandemic. Sub-borrowers had an average of Php15,071.13 monthly income at the time of their application in February 2021 which was 50% less than what they were earning in 2020 with Php30,028.53.
Microentrepreneurs reported that the government’s quarantine measures due to the COVID-19 pandemic impacted their small businesses through decreased operating hours, increased cost of inventory or wholesale products, travel restrictions, greater loss of income from household members losing jobs, and decrease in the demand of their products due to customers’ weaker purchasing power.
“Medyo tulog ang pera namin sa inventories. Dahil sa kailangan pang lumabas ng bayan para bumili ng maraming stocks. Mahirap din ang pagbyahe dahil sa mga checkpoints at need mag secure ng travel pass [Our money is sleeping in our inventories. And we need to travel to the city to be able to purchase more stocks. It is also difficult to travel because of numerous checkpoints that require a travel pass.]
– Micro-entrepreneur- Pototan, Iloilo
The C-19 loans will provide microentrepreneur sub-borrowers the additional capital to help them cope with these challenges. According to RestartME, C-19 microentrepreneurs have explored creative ways to sustain their operations such as resorting to delivery services, selling through social media platforms, improving financial management of the business, and expanding their product lines to meet the needs of their community during this pandemic.
“Ang natutunan ko ang halaga kung pano paikutin ang puhunan, diskarte at tiyaga lang talaga…[What I learned is the value of how I should keep my capital rolling, and the need to be savvy and persevering..]”
-- Sari-sari store owner, San Jose del Monte Bulacan
Launched on 21 October 2020, Revive MFI-Ph Project aims to finance and facilitate the business recovery of large MFIs in the Philippines that were heavily impacted by the COVID-19 pandemic. Under the project, MSMEs will be able to access the C-19 fund through accredited MFI branches and use the loan to restart their business, restore their regular income and repay their loans. The project, which runs until the second quarter of 2022, aims to eventually increase the overall resilience and financial stability of microentrepreneurs and the MFI partners.