Grameen Bank (Philippines)

April 30, 2010

In 2002 we asked you to support Fr. Sean Connaughton’s Grameen Bank project in Kazama, the Philippines. And support it you did. Thanks to your generous donations, more than 25,000 people have utilized the micro-lending efforts of Grameen Kazama to secure livelihoods that provide for them and their families access to education and healthcare as well as their basic daily needs for survival. Almost 90% of the people utilizing the Grameen bank are women, most of whom grew up surrounded by poverty with no access to education who are now trying to provide better opportunities for their own children.

How You Can Help:

  • Training Members/Meeting with Grameen Bank members in Manila, $2,000.00
  • Capital for 100 new members @ $70.00 each, $7,000.00
  • Capital to restart old members, $1,000.00
  • Computer and printer, $1,000.00
  • Auditor and clerical help, $200.00
  • Allowance for officials, $300.00

With an average loan of $40.00 (2,000 pesos) from Grameen Kazama, entrepreneurial spirit took flight and women opened sari sari (corner) stores to serve their communities, turned corners of their homes into food stands and and developed push cart routes to sell necessities to people of the barrios. Although the women had very little formal education, they identified needs in their communities and figured out how to fill them in ways that would provide income for their families allowing them access to education and healthcare.

Now, we are asking you to help Columban Father Dan O’Malley in Pagadian City. Utilizing the successful micro-lending model that was used in Kazama, he has started a Grameen Bank in Pagadian City. The need for affordable money lending in Pagadian City is great as the only other option available to the poor is the loan shark who charges daily interest at rates up to 20%.

Recently Fr. Dan shared with me the experience of two women who joined the Grameen Bank in Pagadian City. It is with great joy that I share them with you.

I feel for the first time I am in control of my life thanks to Grameen.

Erlinda

My name is Erlinda,and I am 48 years old. I am a widow with a daughter who recently completed her second year as a working student at St. Columban College. My mother and three sisters live with me. After high school, I started studying business administration but failed to complete my studies due to poverty.

I joined the Grameen Bank and now feel I have more control of my life. Grameen gave me the capital to make the difference. My business is selling spices and other daily needs in the barrios around Pagadian City. With the loan from Grameen, I am able to buy more stock for my customers, and they don’t have to travel to buy their daily needs. They are loyal to me and me to them.

I feel for the first time I am in control of my life thanks to Grameen.

No other group has really tried to help us in an honest and fair way.

Lourdesita

My name is Lourdesita, and I am 31 years old. My husband, a tricycle driver, and I live in Pagadian City, the Philippines, and we have three children. I became a member of the Grameen Bank 18 months ago in order to help my family. Although my husband works hard, he is paying rent on the tricycle that he drives each day ferrying people to and from work and school. Many days, he brings home only 100 pesos profit ($5.00 US) which is not enough to support our family.

On the days my husband didn’t have enough fares to pay more than the rent on the tricycle, we would have to borrow money for food for ourselves and our children. The local money lenders, the 5/6, will loan you 5 pesos in the morning but expect a payment of 6 pesos in the afternoon. If you don’t pay in the afternoon, they charge you 7 pesos the next morning. We were always working but getting deeper and deeper in debt.

When the opportunity to join the Grameen Bank became available, I jumped at it. No other group has really tried to help us in an honest and fair way.  I went through the bank training course, and received my first loan of 3,000 pesos ($60.00 US). I bought a piglet for 1,000 pesos. After five months, I sold the piglet for 5,500 pesos, repaid my loan and reinvested in two more piglets which I will sell in a couple of months. The money from the piglets has made our lives easier, and I am able to meet the school expenses for my three children in elementary school.

I find myself reflecting again and again on the Lourdesita’s statement that “no other group has really tried to help us in an honest and fair way. “Since the founding of the Missionary Society of St. Columban, we have lived and worked with people who are poor, affirming their position as children of God and bringing the Good News of the Gospel to them.

Your support of the Columban run Grameen Bank Pagadian City is tangible proof that people living thousands of miles away “love their neighbor as they love themselves.” Your donation offers a hand up out of poverty while preserving the dignity of those utilizing the program.

In gratitude and appreciation for all you do in support of our mission efforts, we will offer 100 special Masses, asking God to grant you all you ask of Him.

Gratefully yours in Christ,

Fr. Arturo Aguilar

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History of the Grameen Bank

The Grameen Bank was founded in 1970 as a response to the grinding poverty Prof. Muhammad Yunus saw among the women of Bangladesh. In the following years, the program spread to other countries.

The Grameen Bank is based on the voluntary formation of groups of five people who provide binding group guarantees instead of collateral required by conventional banks. Initially, only two members of the group can apply for a loan. Depending on their repayment performance, the next two borrowers are allowed to apply followed by the fifth member.

Through careful supervision and management, repayment rates are well over 90%. Most of the loans are very small, although just a few dollars can go a long way to easing debt burdens in the poor nations the Grameen Bank serves.