News from MicroSave Asia

• Working with NATCCO on Social Performance Management
• Time Out to Talk to Clients
  
• Delinquency Management at TSKI
  
• Individual Lending for TSPI
  
• Technical Assistance for Capacity Building to Sewa Finance
  

• India
• Africa
• Publications, Trainings and Workshops

Working with NATCCO on Social Performance Management, Philippines

The National Confederation of Cooperatives (NATCCO), one of the largest cooperative networks in the Philippines with 406 cooperative members serving 1.6 million individual members established a partnership with MicroSave to mainstream Social Performance Management (SPM) within the network. Under the Social Performance (SP) Start-Up Fund for Networks Project, NATCCO with MicroSave as its technical service provider, conducted a series of SPM awareness raising workshops from November to December, 2011 to twelve participating cooperative members and to seventeen NATCCO staff which comprise the NATCCO SPM team of trainers and mentors.

The SP Start-Up Fund for Networks Project is a global initiative led by the Microfinance Centre (MFC). It aims to build capacity of 10-15 national networks to promote SPM among its members towards increasing transparency and improving practice in social performance. In addition to this partnership in the Philippines, microfinance networks in India and Bangladesh have likewise identified MicroSave as their respective technical service providers in SPM.

Time Out to Talk to Clients, Philippines

Lack of information on over-indebtedness prevents microfinance institutions from taking a more proactive response to managing the situation. MicroSave, in partnership with two socially-oriented financial institutions, ASKI (Alalay sa Kaunlaran, Inc.) and ASHI (Ahon Sa Hirap, Inc.), conducted market research to understand the phenomenon from the perspective of microfinance clients in the Philippines. Completed in December 2011, the study highlighted how women clients take their roles seriously in managing household cashflow to adequately meet household expenses including repayment of loan(s).

From thirteen focus group discussions, clients pointed out the value of having continuing access to loans as one of the coping mechanisms to meet financial needs. As such, they expressed commitment and willingness to do everything possible to repay their loans. This good intention however goes awry when the client encounters loss of income or emergencies which drive her to borrow some more and possibly become over-indebted.

Three insights can thus be drawn from clients' fund management strategies. First, clients need assistance to build up their income base towards stability and sustainability. Second, in times of plenty, clients will do well to save. Third, clients can benefit from access to microinsurance to prepare them to face emergencies and unexpected events. From the Board room to villages, we hear the same call for MFIs to offer clients with an array of financial products to meet varying needs and situations.

Delinquency Management at TSKI, Philippines

In the past couple of years, TSKI has grown at a rapid pace with a new product and has also faced high staff attrition. As a result, there has arisen severe delinquency. MicroSave was commissioned for a medium term (three months) assignment to help TSKI out of the problem. Team MicroSave adapted two pronged approach - one to implement a quick fix and second to analyse overall problem from strategic point of view and advice medium to long-term measures.

The first step was to improve the monitoring system, a big concern for TSKI. In its absence, process non-compliance was observed and that was one of the major reasons for delinquency. A system for continuous follow up of past due loans was designed. This was implemented in three districts of three regions, to see if recommended approach works in different demographic and geographical set ups.

Under the strategic approach, the major contributor for delinquency at institutional level was analysed. Role of each department and its efficiency in supporting the operations team, policies and overall approach of staff members and senior management were studied. The quick fixes have worked well and rising trend of delinquency has been reversed even during the assignment period.

Individual Lending for TSPI, Philippines

To serve their clients better and stay ahead of competition, TSPI management decided to move from group/cycle based lending methodology to individual cashflow based lending methodology. This called for development and standardisation of tools/procedures to conduct cashflow assessments of its existing clients for their subsequent loan requests. MicroSave was commissioned to develop a toolkit and cashflow templates (data collection and analysis) for the field staff (AOs, SAOs, BMs and AMs) of TSPI using which they could accurately evaluate potential clients' capacity. The objective of the toolkit is to drive focus on making lending decisions and structuring loans on the basis of detailed analysis of the client's cashflows.

To develop the toolkit and templates, MicroSave team conducted discussions with various levels of management and the field staff to understand their capacity and current challenges. Through field visits, actual client businesses and current loan assessment processes and formats were observed. This was followed by development of templates for client's data collection and analysis for three different industry types to encapsulate all the different businesses of TSPI clients. Training material consisting of five customised modules (with presentations, case studies and exercises) was developed using which the field staff could be trained on the tools and processes of detailed cashflow analysis. Each module will be delivered with a gap of fifteen days so that the AOs/SAOs/COs will implement the learnings in the field during loan assessment. The team also conducted a mock training and a Training of Trainers for thirty two TSPI staff members who would henceforth train the rest of the operations staff on the cashflow analysis toolkit.