PinoyME holds first forum for micro-entrepreneurs
PinoyME, a non government organization, recently held its first micro-entreprenuers forum aimed at giving entrepreneurs full knowledge in running a small business and the available financial vehicles in the country.
Ken Ishikawa, one of the organizers from PinoyME, said the group usually hold forums on value chain purposes and on business development services but they have all been intended for the intermediaries – MFIs/NGOs/service providers, and other groups providing direct financial and technical assistance to the micro-entrepreneurs.
“This is the first time we are convening the direct beneficiaries as we want to listen to them and know their stories and challenges first hand,” Ishikawa said.
PinoyME, aside from giving forums and seminars, also lend to conduits and individuals.
According to Juan Ruba, credit and investment officer of PinoyME, the organization lends at least P2.0 million for conduits at wholesale lending at 10-12 percent interest rate with various payment schedule.
Microentreprenuers can borrow at least P5,000 and pay depending on the cash flow of the business.
“We determine the interest rate depending on the business risk profile of the borrower,”Ruba said.
Ruba pointed out that for the wholesale micro-finance loans, the group caters to the medium and small microfinance institutions who have operations in rural and semi-urban areas.
Borrowers of wholesale micro-finace loans have to pass the stringent requirements from financial to non-financial aspects of the organization.
“We need to be very careful in the wholesale lending since we borrow that funds that we lend these MFIs,” Ruba said.
“The delinquency rate of the wholesale loan portfolio is zero,” he continued.
The group maintains a portfolio called the Social Investment Fund (SIF). The fund is sourced from the donations of individuals and corporations who donate as part of their corporate social responsibility.
He further explained that for the SIF loans, the group lends to social individuals who have growth potential but has difficulty in accessing loans to formal financial institutions such as banks.
“Our idea is that through the loan from PMEF (PinoyME Foundation), we grow the borrower become more credit worthy through the financial and non-financial assistance from PMEF. Through our SIF loan, we want our clients to graduate to banks as a source of funding,” Ruba said.
“So you can just imagine the profile of these SIF borrowers who are not yet bank-client worthy – not-so-acceptable governance, financial recording and system that needs a lot of improvement, poor internal control, etc.,” he continued.
PinoyME SIF clients benefit from the flexible repayment terms of PMEF that is based on the cash flow of the business being financed.
The group also has partnership with other financial institutions like Philippine Business for Social Progress (PBSP), a non-profit social development foundation.
PMEF has P100 million worth of credit line from PBSP for small and medium enterprise credit.
“Since we have maxed our credit line with PBSP, we are presently talking with a bank to provide additional credit line to PMEF for its expansion this year. The interest spread that we earn from clients support the facilitation of the loans we provide and the necessary business processes which keep our organization afloat,” said Ruba.
PinoyME, pays PBSP every quarter for the principal amount by the organization.
Recently, PinoyME lend to a secondary cooperative in Antique borrowed P1.0M from us for its muscovado sugar trading business while another primary cooperative also borrowed P600,000 for muscovado sugar trading business.
Two years ago, PMEF also lent P240,000 to an NGO who in turn lent the money to 15 backyard broiler contract growers to expand their capacity.
To date, with total loan releases of around P200M, PMEF (PinoyME Foundation), through its partners, has been able to reach at least 64,000 micro-entrepreneurs across the country.
PinoyME is a consortium founded by ex-President Corazon C. Aquino to help alleviate poverty in the country through microfinance and microenterprise. – Jennifer Ambanta
Published in Malaya Business Insight, http://www.malaya.com.ph/03052012/bank3.html ; 5 March 2012