USAID visits MABS Participating Banks in Cebu City

A team from the United States Agency for International Development (USAID)/Philippines – composed of USAID Deputy Mission Director Roger Carlson, Office of Economic Development and Governance (OEDG) Head Maria Rendon and Contracting Officer’s Technical Representative Teresita Espenilla – conducted an exposure visit to MABS participating banks (PBs) and microfinance clients in Cebu City on March 18, 2010. The team visited the First Agro Industrial Rural (FAIR) Bank’s branch in Mandaue City and Green Bank’s branch in Subangdaku.
The banks’ presidents, Mr. Gil Verallo and Mr. Omar Andaya, respectively, gave the team an overview of their respective banks’ operations and microfinance programs and activities. Through the visit to the banks’ microloan clients, the team gained an understanding of the microenterprise sector and the demographics and profiles of clients being served by the banks.
FAIR Bank
Established in 1988, FAIR Bank serves the banking needs of rural communities in the province of Cebu through 12 branches and 2 field offices. The bank joined the MABS Program in 2005, offering both individual and group microfinance products. Since then, the bank had disbursed more than PhP1.8 billion (around US$37.7 million) to more than 44,000 new micro-borrowers. The bank also serves almost 63,000 microdeposit accounts (accounts with balances below PhP15,000) totaling PhP81 million (around US$1.7 million).
Aside from business loans to microentrepreneurs, the bank is currently pilot-testing its housing microfinance loan product after completing the market research and product designing last January 2010 under the guidance of MABS. As of March, the bank had disbursed PhP1.5 million (around US$31,000) HMF loans to 40 existing micro-borrowers. In addition to support for their microfinance and housing microfinance, MABS has been working with FAIR Bank in developing formal microinsurance services through partnership with a licensed and regulated insurance company of its choice. MABS is also assisting the bank with transitioning its group loan product borrowers from group liability to individual liability product.
With her most recent loan from FAIR Bank, client Ms. Marcosa Igot started a tailoring shop that manufactures bags, aprons and pillowcases from scrap fabric sourced from factories inside the Mactan Export Processing Zone. Her previous loans from FAIR Bank were used to purchase raw materials for her handicrafts manufacturing business. She used to purchase the raw materials on credit – for a much higher buying price. Because they need additional space for the tailoring shop, the family is currently renovating their house. Ms. Igot also plans to avail of FAIR Bank’s housing microfinance loan to finance the ongoing renovation.
Green Bank
Green Bank has expanded to a network of 46 branches from the 6 branches it had when it joined the MABS Program in 2000.  In 2004, Green Bank put into action its expansion strategy and established branches in Visayas and Luzon, making it the first rural bank with nationwide outreach. More than 40 branches of Green Bank are implementing MABS-designed microfinance programs: for microenterprise loans, the bank has both the individual loan product TREES and the group loan product BULAK.
According to Mr. Ferdinand Pedrano, one of Green Bank’s TREES clients, his TREES loans allow him to purchase the raw materials he needs to meet his clients’ orders. “When I get orders from clients, they only initially give me a percentage of the total contract price. My loans help me buy the materials I need so I can make my deliveries on time.”  After gaining experience and contacts from almost two decades of running the machine shop operations of shipping and engineering firms, Mr. Pedrano resigned from his job in 2006 to start his own machine shop. He now counts some of the companies he worked for as regular clients.
Green Bank also has a microsavings product, the BINHI. Since becoming a PB, Green Bank has disbursed almost PhP4 billion (around US$85 million) in microloans to more than 93,000 microborrowers. The bank has also serves 122,000 microdeposit clients.
Building on its tradition of pioneering MABS-developed microfinance innovations, Green Bank piloted the Program’s mobile phone banking services, housing microfinance product, and micro agri-loan product.  As of December 2009, the bank averages 7,000 MPBS transactions totaling PhP25 million (around US$524,000) a month. The bank has disbursed 487 housing microfinance loans to 461 clients, totaling PhP18 million (around US$377,000). The bank has also disbursed more than 5,700 micro agri-loans totaling more than PhP88 million (around US$1.8 million) to more than 2,300 small farmers.

A team from the United States Agency for International Development (USAID)/Philippines – composed of USAID Deputy Mission Director Roger Carlson, Office of Economic Development and Governance (OEDG) Head Maria Rendon and Contracting Officer’s Technical Representative Teresita Espenilla – conducted an exposure visit to MABS participating banks (PBs) and microfinance clients in Cebu City on March 18, 2010. The team visited the First Agro Industrial Rural (FAIR) Bank’s branch in Mandaue City and Green Bank’s branch in Subangdaku.

The banks’ presidents, Mr. Gil Verallo and Mr. Omar Andaya, respectively, gave the team an overview of their respective banks’ operations and microfinance programs and activities. Through the visit to the banks’ microloan clients, the team gained an understanding of the microenterprise sector and the demographics and profiles of clients being served by the banks.

FAIR Bank

Established in 1988, FAIR Bank serves the banking needs of rural communities in the province of Cebu through 12 branches and 2 field offices. The bank joined the MABS Program in 2005, offering both individual and group microfinance products. Since then, the bank had disbursed more than PhP1.8 billion (around US$37.7 million) to more than 44,000 new micro-borrowers. The bank also serves almost 63,000 microdeposit accounts (accounts with balances below PhP15,000) totaling PhP81 million (around US$1.7 million).

Ms. Marcosa Igot is one of FAIR Banks microenterprise loan clients.

Ms. Marcosa Igot is one of FAIR Bank's microenterprise loan clients.

Aside from business loans to microentrepreneurs, the bank is currently pilot-testing its housing microfinance loan product after completing the market research and product designing last January 2010 under the guidance of MABS. As of March, the bank had disbursed PhP1.5 million (around US$31,000) HMF loans to 40 existing micro-borrowers. In addition to support for their microfinance and housing microfinance, MABS has been working with FAIR Bank in developing formal microinsurance services through partnership with a licensed and regulated insurance company of its choice. MABS is also assisting the bank with transitioning its group loan product borrowers from group liability to individual liability product.

With her most recent loan from FAIR Bank, client Ms. Marcosa Igot started a tailoring shop that manufactures bags, aprons and pillowcases from scrap fabric sourced from factories inside the Mactan Export Processing Zone. Her previous loans from FAIR Bank were used to purchase raw materials for her handicrafts manufacturing business. She used to purchase the raw materials on credit – for a much higher buying price. Because they need additional space for the tailoring shop, the family is currently renovating their house. Ms. Igot also plans to avail of FAIR Bank’s housing microfinance loan to finance the ongoing renovation.

Green Bank

Green Bank has expanded to a network of 46 branches from the 6 branches it had when it joined the MABS Program in 2000.  In 2004, Green Bank put into action its expansion strategy and established branches in Visayas and Luzon, making it the first rural bank with nationwide outreach. More than 40 branches of Green Bank are implementing MABS-designed microfinance programs: for microenterprise loans, the bank has both the individual loan product TREES and the group loan product BULAK.

Mr. Pedrano employs 12 workers who help him produce machined parts and components.

Mr. Pedrano employs 12 workers who help him produce machined parts and components.

According to Mr. Ferdinand Pedrano, one of Green Bank’s TREES clients, his TREES loans allow him to purchase the raw materials he needs to meet his clients’ orders. “When I get orders from clients, they only initially give me a percentage of the total contract price. My loans help me buy the materials I need so I can make my deliveries on time.”  After gaining experience and contacts from almost two decades of running the machine shop operations of shipping and engineering firms, Mr. Pedrano resigned from his job in 2006 to start his own machine shop. He now counts some of the companies he worked for as regular clients.

Green Bank also has a microsavings product, the BINHI. Since becoming a PB, Green Bank has disbursed almost PhP4 billion (around US$85 million) in microloans to more than 93,000 microborrowers. The bank has also serves 122,000 microdeposit clients.

Building on its tradition of pioneering MABS-developed microfinance innovations, Green Bank piloted the Program’s mobile phone banking services, housing microfinance product, and micro agri-loan product.  As of December 2009, the bank averages 7,000 MPBS transactions totaling PhP25 million (around US$524,000) a month. The bank has disbursed 487 housing microfinance loans to 461 clients, totaling PhP18 million (around US$377,000). The bank has also disbursed more than 5,700 micro agri-loans totaling more than PhP88 million (around US$1.8 million) to more than 2,300 small farmers.