MicroStart Philippines
Case Study for the Midterm Evaluation
Jill Elisabeth Rhyne
1 November 1999
Related Documents:
"MicroStart: Finding and Feeding Breakthroughs, 1999"
Bayan Microfinance
Bayan Microfinance is a program of the corporate foundation of ABS-CBN, well-known in the Philippines as a leading broadcasting and media firm. ABS-CBN Foundation mainly carries out relief activities. It began a small project of microcredit in 1993. In 1997, it decided to make this into a major program, naming it Bayan Microfinance. Bayan is in the process of establishing itself as a separate NGO with its own Board of Directors. It is already operationally separate from the Foundation.
The sponsors of Bayan Microfinance intend it to run on a businesslike basis, without need for major subsidies from the company. Its financial statements show operational self-sufficiency, with interest income on loans exceeding operating expenses. It has good portfolio control, with PAR-30 at 3.7 percent. Bayan has a very aggressive plan for expansion, growing from 1,500 clients at the end of 1998 to nearly 5,000 today, with the intent to reach between 15,000 and 20,000 by the end of 2000.
The manager of Bayan has been with the program since it began, and as a Bangla speaker, he has developed a close personal relationship with Shafique Choudhury who is assisting him in developing a strategy and vision. Bayan has assembled a senior staff of experienced microfinance practitioners: TPKI's and CCT's losses have been Bayan's gains.
Most of Bayan's clients are women in the modified Grameen program. Bayan provides greater flexibility on group size (3-7 people), loan term (3 to 6 months) and loan size, and adds a moral/social aspect to its group meetings, like most of the programs in the Philippines. The interest rate is 36 percent flat per year. Bayan also operates small individual and tricycle loan programs.
Bayan is setting up two pilot branches under MicroStart in Tondo, a Manila slum. It has already begun disbursing loans. These branches will operate as closely as possible on the ASA model. Bayan considers the pilot branches "our laboratory."
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