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Microenterprise Programs Helps Entrepreneurs - Filipino couple expand family business through USAID banking services program
Albert de la Pea and his wife Nonita are partners in more than just marriage - they run a small family business together.
Having worked in the electrical supply business since 1996, the de la Peas had never before received a loan from a bank.
Most microentrepreneurs in the Philippines have difficulty acquiring capital and must rely on informal lenders who charge up to 20 percent per month for loans.
"Interest was too high and we couldn't afford that option," says Mrs. de la Pea, who runs the store while her husband Albert teaches at a nearby school.
However in November 2000, the couple was offered the chance to participate in a new USAID microfinance program provided by their local bank, the Rural Bank of Cantilan, on Mindanao Island.
The Rural Bank of Cantilan received support for the USAID-funded Microenterprise Access to Banking Services program which is designed to assist Philippine rural banks in developing the capability to provide profitable services, both loans and deposit services, to microenterprises.
A year ago, the de la Peas applied for and received a 17,000 peso ($340) loan to expand business at their electrical store. After just six months of diligent repayment on their first loan, they were able to increase the amount they initially borrowed three-fold.
The Rural Bank of Cantilan considers the de la Peas to be top clients who never miss a payment. Such behavior is encouraged under the program, which strictly enforces a zero tolerance policy on delinquent loans. Several loans later, the de la Peas have moved their store into a larger building, increased the stock available to their customers, and quadrupled their daily sales. The de la Peas soon hope to move to an even larger location.
The Rural Bank of Cantilan also encourages all microenterprise borrowers to open and maintain a savings account. Since their initial loan, Mr. and Mrs. de la Pea have saved almost 15,000 pesos. With four young children, they hope to continue saving in preparation for their family's and children's future
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