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INTRODUCTION
Around the world, microfinance institution as a form of financial development has its
primary aim to alleviate poverty. Microfinance involves the provision of credit and other
financial services and products of small amount for less fortunate people to increase their income
levels and improve standards of living. The size of the group is restricted to small range and
experience around the world reveals that this group-based approach gives access to members on
easy terms and conditions. Microfinance has the capacity to enhance the socio-economic
development of vulnerable group by building community based structure that builds mutual trust
and support.
Rural Microenterprise Finance Project (RMFP) established year 1996 in the Philippines
organizations in providing credit. It seeks to create institutions that will exclude the gap of poor
people who are incapable of reaching the requirements of conventional formal institutions.
Microfinance is about reaching the less fortunate by reducing the vulnerability to make the
transformation from everyday survival to future planning. It is describe as the social intervention
that defines the people needs, problems, solutions and thus give poor people the chance to
constraints that will shape their responses and behavior. It can deliver social benefits on an on-
Sariaya is just one of the places in Quezon province dealing in the challenge of low
income households who hardly have any asset and access on formal financial institutions. This
case opened the place in different microfinance institutions which includes the Tulay sa Pag-
meeting the financial needs of the people in the area. The microfinance provides small credit,
micro saving and micro-insurance and is gradually emerging as one of the most strategies to
reduce poverty. But members have different perceptions on the contribution of microfinance
operations and services on their lives. It depends on several categories that the researchers
Thus, the growth of microfinance institution and services has attracted the attention of the
researchers, individuals and financial institutions during the last few years. Hence it is an
appropriate and relevant attention as to how the microfinance institutions like TSPI impact the
The main objective of this study is to determine and assess the socio-economic
contribution of TSPI to its members in Sariaya, Quezon. Specifically, it aimed to accomplish the
following objectives:
through :
services.
Microfinance plays a vital role in the society to combat poverty and serve as the source of
capital for the less privilege to be able to depart from their poor state of living. The researchers
conducted this study because they have known the role and significance of microfinance
operations especially its objective which is focused on uplifting and improving everyone's life
and it created a greater impact in our economy. The findings of this study may be beneficial to
the following:
Members of TSPI - The result of the study may help them to evaluate their investment in
TSPI and its impact to their lives. It may provide the members the proposition of knowing the
benefits of being part of microfinance program. For practical life advice, it’s more quite
economical to be part of microfinance institution in order for them to see the fair opportunity of
prosperous growth rather than to avail services from loan sharks who gave them large amount of
burden due to unreasonable interest rates that they might suffer at the end.
TSPI Development Corporation - This research study may help the administration of the
business in improving and innovating their operational activities and services in accordance to its
members' responses. It may also become the basis of initiating other policies with regards to
microfinance programs hence to improve the socio economic status of the members. It may serve
as the measure of evaluation if they are providing quality service and really achieving their goals
or not.
Future Researchers - This study may help the students, who wish to make further study,
the prior and useful information about the subject. This research may also be used by them as a
Researchers - This study may help the researchers to gain knowledge on how the
microfinance institutions works specially the program and services it offers and its effect to its
programs that is duly conducted by lending institutions. It may give additional knowledge that
The study was limited only in identifying the socio-economic contribution of the TSPI
profile of the lending institution and the respondents, evaluating the degree of socio-economic
contribution to its members and the problems encountered by the members to the microfinance
institution. The researchers did not consider other category like the use of financial statements of
the organization.
Research findings are based on the responses of the 96 respondents out of 2,400
estimated total program members of TSPI in Sariaya. The sample size was taken by the
observation, interview, research from the internet and related studies. The research was
the readers.
Active Members are clients who avail and pay the loan in a timely basis and
Credit is the process on which members were able to obtain financial services before payment.
Contribution is the part played by TSPI in bringing about a result or helping the members to
advance from their current living condition through the services it offers.
Empowerment refers to increasing the spiritual, political, social and economic strength of the
Microfinance Institution which includes TSPI is an organization that offers financial services to
low income populations. Almost all give loans to their members, and many offer insurance and
other services.
Organizational Structure shows how activities such as task allocation, coordination and
Social empowerment is related to the participation of people in Sariaya community and political
member’s works experience and social position in relation to others, based on income, education,
and occupation.
communities the opportunity to experience fullness of life through small and micro-enterprise
development. TSPI provides the poor with opportunities to lead self-sufficient, responsible and
dignified lives, through a broad range of microfinance services for micro and small enterprise
development.
Chapter II
In this section, the researcher provides a brief review of the literature to place this
research paper in context. This also helps the researchers to have a clearer understanding of the
study.
Microcredit and microfinance are relatively new terms in the field of development, first
coming to prominence in the 1970s, according to Robinson (2001) and Otero (1999). Prior to
then, from the 1950s through to the 1970s, the provision of financial services by donors or
governments was mainly in the form of subsidised rural credit programmes. These often resulted
in high loan default, high loses and an inability to reach poor rural households (Robinson, 2001).
Robinson states that the 1980s represented a turning point in the history of microfinance in that
MFIs such as Grameen Bank and BRI2 began to show that they could provide small loans and
savings services profitably on a large scale. They received no continuing subsidies, were
commercially funded and fully sustainable, and could attain wide outreach to clients (Robinson,
2001). It was also at this time that the term “microcredit” came to prominence in development
(MIX3, 2005).
The difference between microcredit and the subsidised rural credit programmes of the
1950s and 1960s was that microcredit insisted on repayment, on charging interest rates that
covered the cost of credit delivery and by focusing on clients who were dependent on the
informal sector for credit (ibid.). It was now clear for the first time that microcredit could provide
large-scale outreach profitably. The 1990s “saw accelerated growth in the number of
microfinance institutions created and an increased emphasis on reaching scale” (Robinson, 2001,
p.54). Dichter (1999, p.12) refers to the 1990s as “the microfinance decade”. Microfinance had
now turned into an industry according to Robinson (2001). Along with the growth in microcredit
institutions, attention changed from just the provision of credit to the poor (microcredit), to the
provision of other financial services such as savings and pensions (microfinance) when it became
clear that the poor had a demand for these other services (MIX, 2005).
The importance of microfinance in the field of development was reinforced with the
launch of the Microcredit Summit in 1997. The Summit aims to reach 175 million of the world’s
poorest families, especially the women of those families, with credit for the self-employed and
other financial and business services, by the end of 20154 (Microcredit Summit, 2005). More
recently, the UN, as previously stated, declared 2005 as the International Year of Microcredit.
Between 4 to 6 of October 2006, the 8th National Summit of Cooperatives was held in
Puerto Princesa City, Palawan with some 4,000 participants. The National Summit of
Cooperatives was first convened in November 1995 with 600 in attendance. This was the same
year that the policy makers only begun to seriously focus on microfinance in addressing poverty.
If all of the electric cooperatives register with the Cooperative Development Authority, an
national network of microfinance banks and for such banks be established in Luzon, Visayas and
Mindanao to complement the work of the rural banks owned by a few families. He also
announced a plan to launch the First Dagupan MicroFinance Bank with a PhP 17.5 million paid
up capital and to be managed by Jose Oviedo, a well-known cooperative leader in the region.
In November 2006, Zobel De Ayala in his “Strategy for National Competitiveness,”
referred to the Grameen method and other microfinance projects as the new business models that
should be supported because they get people engaged as equity partners in their own futures.
Globe Telecom has empowered over 650,000 individuals as resellers of telecom minutes through
the autoload system. This generated over PhP 40 billion a year with over ten percent margins for
the resellers.
In January 2007, House Speaker Jose De Venecia during the 12th Summit of the
combating poverty to be headed by the 2006 Nobel Peace Prize winner Muhammad Yunus.
According to De Venecia, the proposal has the support of Asian parliamentarians in a meeting
Yunus and the Grameen Bank of Bangladesh won the 2006 Nobel Peace Prize for
grassroots efforts to lift millions out of poverty. Grameen bank was established to lend to the
poorest, particularly women, enabling them to start up small businesses without collateral. The
Nobel Committee said in its citation “Lasting peace cannot be achieved unless large population
groups find ways in which to break out of poverty. Microcredit is one such means. Development
from below also serves to advance democracy and human rights.” The Grameen Bank lends to
6.6 million people, 96 percent of them women. The Bank is 94 percent owned by borrowers and
the rest by the government. Grameen banking has been in existence for 30 years.
On 2 May 2007, President Gloria Arroyo launched a livelihood lending facility for
government employees that included lectures on entrepreneurship and enterprise planning. For a
start, PhP one billion has been allocated for the “Puhunang Pangnegosyo Para sa Kawani ng
Gobyerno” through employee cooperatives and associations. On 12 May 2007, Lucio Tan
declared a PhP 4 billion investment on microfinance after a visit to a cooperative in Nueva Ecija.
Presently, Arroyo has facilitated PhP 51.98 billion for microfinance which have benefited 3.1
million poor families. On the other hand, BSP Governor Amando Tetangco has commended the
banking sector for its microfinance loan of PhP 3.7 billion to 630,000 borrowers by 200 banks.
About 1,000 rural shareholding banks and 8,000 agricultural cooperatives serve as microfinance
conduits of the Land Bank of the Philippines. The micro, small and medium enterprises make up
99 percent of total industries and employ 70 percent of the workforce (ADB, 2002: 100). There
are also 4.1 million families belonging to the lowest income level in society who are engaged in
microenterprise activities. It is estimated that 17 million people still do not have access to
microfinance services. Successful societies have to unite around a powerful story with a
sustaining ideology. Microfinance has a story to tell that leaders such as Arroyo, De Venecia and
The Asian Development Bank (ADB) defines microfinance as the provision of a broad
range of financial services such as: deposits, loans, payment services, money transfers and
insurance to the poor and their microenterprises. There are three types of sources of microfinance
and include: formal institutions such as rural banks and cooperatives; semi-formal institutions
noted that about 90 percent of the 180 million poor households in Asia do not have access to
financial services. Perceived to be high risks, most formal financial institutions have denied the
poor access to loans. While increased earnings are by no means automatic, reducing vulnerability
allow poor households to make the transformation from everyday survival to planning for the
future.
Microfinance is about reaching the poorest, especially women, who have proven that the
poor is financially viable. It is described to be a social intervention that defines the needs of the
poor, their problems, the solutions and thus give the poor greater control over resources and
break the cycle of their deprivation themselves. The poor relies heavily on self-finance or
informal sources of capital. A commitment towards financial services should stimulate the
development of the poor’s capacities to secure control over the constraints which shape their
Microfinance is about providing financial services to the poor who are not served by the
conventional formal financial institutions (World Bank, 2004: 305). There are two main features
of microfinance that distinguish it from formal financial products: first is the smallness of loans
advanced and or savings collected and second, the absence of asset based collateral. The
provision of such financial services requires innovative delivery channels and methodologies.
Microfinance clients are the poor and vulnerable non poor who have a relatively stable source of
income. They are typically self-employed who are often household based entrepreneurs or small
farmers or engaged in small income generating activities such as food processing and petty trade.
Access to credit allows poor people to take advantage of economic opportunities. The core
principles of microfinance consist of the following: that the poor need sustained access to
financial services and products; that the poor have the capacity to repay their loans and to save;
microfinance institution (MFI) is an organization that provides financial services to low income
According to Okiocredit literature, the terms microcredit and microfinance are often used
interchangeably, but it is important to highlight the difference between them because both terms
are often confused. Sinha states “microcredit refers to small loans, whereas microfinance is
appropriate where NGOs and MFIs1 supplement the loans with other financial services (savings,
providing credit to the poor, but microfinance also involves additional non-credit financial
Consultative Group to Assist the Poor (CGAP) is committed to building more inclusive
financial systems for the poor. As a basis of reasoning in microfinance, it enumerated the eleven
1. The poor need a variety of financial services, not just loans. Just like everyone else,
poor people need a wide range of financial services that are convenient, flexible, and reasonably
priced. Depending on their circumstances, poor people need not only credit, but also savings,
services enables the poor to increase incomes, build assets, and reduce their vulnerability to
external shocks. Microfinance allows poor households to move from everyday survival to
planning for the future, investing in better nutrition, improved living conditions, and children’s
3. Microfinance means building financial systems that serve the poor. Poor people
constitute the vast majority of the population in most developing countries. Yet, an
overwhelming number of the poor continue to lack access to basic financial services. In many
concern for donors, governments, and socially-responsible investors. In order to achieve its full
potential of reaching a large number of the poor, microfinance should become an integral part of
poor people are not able to access financial services because of the lack of strong retail financial
intermediaries. Building financially sustainable institutions is not an end in itself. It is the only
way to reach significant scale and impact far beyond what donor agencies can fund.
Sustainability is the ability of a microfinance provider to cover all of its costs. It allows the
continued operation of the microfinance provider and the on-going provision of financial
services to the poor. Achieving financial sustainability means reducing transaction costs, offering
better products and services that meet client needs, and finding new ways to reach the unbanked
poor.
financial systems for the poor means building sound domestic financial intermediaries that can
provide financial services to poor people on a permanent basis. Such institutions should be able
to mobilize and recycle domestic savings, extend credit, and provide a range of services.
development banks—will gradually diminish as local financial institutions and private capital
markets mature.
6. Microcredit is not always the answer. Microcredit is not appropriate for everyone or
every situation. The destitute and hungry that have no income or means of repayment need other
forms of support before they can make use of loans. In many cases, small grants, infrastructure
improvements, employment and training programs, and other non-financial services may be
more appropriate tools for poverty alleviation. Wherever possible, such non-financial services
7. Interest rate ceilings can damage poor people’s access to financial services. It costs
much more to make many small loans than a few large loans. Unless micro lenders can charge
interest rates that are well above average bank loan rates, they cannot cover their costs, and their
growth and sustainability will be limited by the scarce and uncertain supply of subsidized
funding. When governments regulate interest rates, they usually set them at levels too low to
permit sustainable microcredit. At the same time, micro lenders should not pass on operational
inefficiencies to clients in the form of prices (interest rates and other fees) that are far higher than
National governments play an important role in setting a supportive policy environment that
stimulates the development of financial services while protecting poor people’s savings. The key
things that a government can do for microfinance are to maintain macroeconomic stability, avoid
interest-rate caps, and refrain from distorting the market with unsustainable subsidized, high-
delinquency loan programs. Governments can also support financial services for the poor by
improving the business environment for entrepreneurs, clamping down on corruption, and
improving access to markets and infrastructure. In special situations, government funding for
sound and independent microfinance institutions may be warranted when other funds are lacking.
9. Donor subsidies should complement, not compete with private sector capital. Donors
should use appropriate grant, loan, and equity instruments on a temporary basis to build the
agencies, credit bureaus, audit capacity, etc.), and support experimental services and products. In
some cases, longer-term donor subsidies may be required to reach sparsely populated and
financial services for the poor into local financial markets; apply specialist expertise to the
design and implementation of projects; require that financial institutions and other partners meet
minimum performance standards as a condition for continued support; and plan for exit from the
outset.
10. The lack of institutional and human capacity is the key constraint. Microfinance is a
specialized field that combines banking with social goals, and capacity needs to be built at all
levels, from financial institutions through the regulatory and supervisory bodies and information
systems, to government development entities and donor agencies. Most investments in the sector,
11. The importance of financial and outreach transparency. Accurate, standardized, and
providing services to the poor is imperative. Bank supervisors and regulators, donors, investors,
and more importantly, the poor who are clients of microfinance need this information to
projects is necessary or not according to Simanowitz. The argument is that if the market can
provide adequate proxies10 for impact, showing that clients are happy to pay for a service,
assessments are a waste of resources (ibid.). However, this is too simplistic a rationale as market
proxies mask the range of client responses and benefits to the MFI (ibid.)
Therefore, impact assessment of microfinance interventions is necessary, not just to
demonstrate to donors that their interventions are having a positive impact, but to allow for
learning within MFIs so that they can improve their services and the impact of their projects.
Poverty is more than just a lack of income. Wright highlights the shortcomings of focusing solely
on increased income as a measure of the impact of microfinance on poverty. He states that there
is a HIV/AIDS, malaria and other diseases; (vii) ensure environmental sustainability; and (viii)
The significant difference between increasing income and reducing poverty are good
client retention and repayment rates. He argues that by increasing the income of the poor, MFIs
are not necessarily reducing poverty. It depends on what the poor do with this money, oftentimes
it is gambled away or spent on alcohol (1999), so focusing solely on increasing incomes is not
enough. The focus needs to be on helping the poor to “sustain a specified level of well-being” by
offering them a variety of financial services tailored to their needs so that their net wealth and
It is commonly asserted that MFIs are not reaching the poorest in society. However,
despite some commentators’ scepticism of the impact of microfinance on poverty, studies have
shown that microfinance has been successful in many situations. According to Littlefield,
Murduch and Hashemi, “various studies…document increases in income and assets, and
Zimbabwe, Bangladesh and Uganda which all shows very positive impacts of microfinance in
reducing poverty. For instance, a report on a SHARE project in India showed that three-quarters
of clients saw “significant improvements in their economic well-being and that half of the clients
graduated out of poverty, Dichter (1999, p.26) states that microfinance is a tool for poverty
reduction and while arguing that the record of MFIs in microfinance is “generally well below
From a study of a number of MFIs he states that findings show that consumption
smoothing effects, signs of redistribution of wealth and influence within the household are the
most common impact of MFI programmes (ibid.). Hulme and Mosley (1996, p.109) in a
comprehensive study on the use of microfinance to combat poverty, argue that well-designed
programmes can improve the incomes of the poor and can move them out of poverty. They state
that “there is clear evidence that the impact of a loan on a borrower’s income is related to the
level of income” as those with higher incomes have a greater range of investment opportunities
and so credit schemes are more likely to benefit the “middle and upper poor”.
However, they also show that when MFIs such as the Grameen Bank and BRAC
provided credit to very poor households, those households were able to raise their incomes and
their asset. Mayoux states that while microfinance has much potential11 the main effects on
poverty have been credit making a significant contribution to increasing incomes of the better-off
poor, including women, microfinance services contributing to the smoothing out of peaks and
troughs in income and expenditure thereby enabling the poor to cope with unpredictable shocks
and emergencies. Hulme and Mosley show that when loans are associated with an increase in
assets, when borrowers are encouraged to invest in low-risk income generating activities and
when the very poor are encouraged to save; the vulnerability of the very poor is reduced and
their poverty situation improves. Johnson and Rogaly (1997, p.12) also refer to examples
whereby savings and credit schemes were able to meet the needs of the very poor. They state that
microfinance specialists are beginning to view improvements in economic security, rather than
income promotion, as the first step in poverty reduction (ibid.) as this reduces beneficiaries’
overall vulnerability.
Therefore, while much debate remains about the impact of microfinance projects on
poverty, we have seen that when MFIs understand the needs of the poor and try to meet these
needs, projects can have a positive impact on reducing the vulnerability, not just of the poor, but
Traditionally, the impact of microfinance projects was assessed by the changes in the
income or well-being of the clients. Mansell-Carstens, cited in Rogaly (1996, p.103) argues that
such a focus is flawed because respondents may give false information. It is also very difficult to
ascertain all the sources of income of a client, so a causal effect is difficult to establish, and it is
also difficult to establish what would have happened if the loan was not given.
Therefore a broader analysis is needed that takes more than economic impact into
consideration. We have seen that poverty and livelihood security consist of economic and social
conditions, therefore, when analysing the impact of microfinance, social impact must be
assessed. Kabeer (2003, p.106) states that wider social impact assessment is important for an
organisation’s internal learning process, as an MFI should be aware of the “full range of changes
associated with its efforts and uses these to improve its performance”. She considers social
impact to relate to human capital such as nutrition, health and education, as well as social
networks (2003). Impact must be assessed on each of these issues if a true picture of the impact
of microfinance is to be obtained.
However, Kabeer moves beyond individual or household analysis to state that analysis
should also be conducted at community, market/economy and national/state levels (2003). She
refers to these as “domains of impact” because societies are comprised of different institutional
domains each with their own rules, norms and practices which can be influenced by
microfinance interventions in different ways (2003, p.109). Kabeer (2003, p.110) not only refers
to domains of impact but also highlights dimensions of change that should be assessed. She lists
cognitive change, behavioural change, material change, relational change and institutional
change as dimensions of change that need to be taken into account if the wider effects of
Zohir and Matin (2004, p.301) make a similar point when they state that the impact of
not take into account the possible positive externalities on spheres beyond households”. They
propose that impact should be examined from cultural, economic, social and political domains at
individual, enterprise and household levels (2004). McGregor et al. (2000, p.3) states that wider
social and economic impacts can occur through the labour market, the capital market, the market
for goods consumed by poor people, through production linkages and through clients
Chowdhury, Mosley and Simanowitz (2004) argue that if microfinance is to fulfil its
social objectives of bringing financial services to the poor it is important to know the extent to
which its wider impacts contribute to poverty reduction. In the following sections I will examine
community level, to show what learning can be gained when impact assessments have a broad
scope of analysis.
Health and education are two key areas of non-financial impact of microfinance at a
household level. Wright (2000, p.31) states that from the little research that has been conducted
on the impact of microfinance interventions on health and education, nutritional indicators seem
to improve where MFIs have been working. Research on the Grameen Bank shows that members
are statistically more likely to use contraceptives than non-members thereby impacting on family
size (ibid.). Littlefield, Murduch and Hashemi also acknowledge the sparse specific evidence of
the impact of microfinance on health but where studies have been conducted they conclude,
“households of microfinance clients appear to have better nutrition, health practices and health
Among the examples they give is of FOCCAS, a Ugandan MFI whose clients were given
health care instructions on breastfeeding and family planning. They were seen to have much
better health care practices than non-clients, with 95% of clients engaged in improved health and
nutrition practices for their children, as opposed to 72% for non-clients (Littlefield, Murduch and
Hashemi, 2003). Microfinance interventions have also been shown to have a positive impact on
the education of clients’ children. Littlefield, Murduch and Hashemi (2003, p.4) state that one of
the first things that poor people do with new income from microenterprise activities is to invest
Studies show that children of microfinance clients are more likely to go to school and
stay longer in school than for children of non-clients. Again, in their study of FOCCAS, client
households were found to be investing more in education than non-client households. Similar
findings were seen for projects in Zimbabwe, India, Honduras and Bangladesh (ibid.). Robinson
(2001) in a study of 16 different MFIs from all over the world shows that having access to
microfinance services has led to an enhancement in the quality of life of clients, an increase in
their self-confidence, and has helped them to diversify their livelihood security strategies and
women in Tamil Nadu, India, found that their project had many positive impacts on their clients
(Noponen, 2005). The programme was having a “positive impact on livelihoods, social status,
treatment in the home and community, living conditions and consumption standards” (2005,
p.202). Compared with new members, some of the findings showed that long-term members
were more likely to live in tile roofed and concrete houses, to have a higher percentage of their
children in school, to have lower incidence of child labour, to be the largest income provider or
joint provider in the home, and to make decisions on their own as regards major purchases
(Noponen, 2005). Clients also reflected significant increases in ownership of livelihood assets
impact assessments on eight of its partner MFIs focusing on economic and social impacts at an
individual, household and 15 Changes in the terms on which people interact with one another.
Many of the impacts on income were positive for the less poor and negative for the poorer
clients, a trend that we have already seen. Marconi and Mosley (2004) state that this should not
be surprising as poorer clients are more risk adverse and less likely to invest in fixed capital and
so are more vulnerable to having to sell productive assets in the event of a shock. However, it
was found that social networks played an important part in helping clients escape from poverty.
Access to social networks provided clients with a defence against having to sell physical
and human assets and so protected household assets (ibid.). Chowdhury and Bhuiya (2004,
p.377) assessed impact of BRAC’s poverty alleviation programme from a “human well-being”
well-being. The project included the provision of microfinance and training of clients on human
and legal rights (ibid.). They noted that the project led to better child survival rates, higher
nutritional status, improvement in the basic level of education, and increased networking in the
community.
Children of BRAC clients suffered from far less protein-energy malnutrition than
children of non-members, and the educational performance of BRAC member’s children was
also higher than that of children in non-BRAC households (ibid.). BRAC member households
spent significantly more on consumption of food items than poor non-members did and per
capita calorie intake was also significantly higher. Therefore, various studies and findings
indicate that microfinance can, and is having very positive and diverse impacts at a beneficiary
level.
of microfinance. UNCDF (2004) states that studies have shown that microfinance plays three key
roles in development. It helps very poor households meet basic needs and protects against risks is
supporting women’s economic participation and so promotes gender equity. Otero (1999, p.10)
illustrates the various ways in which “microfinance, at its core combats poverty”. She states that
microfinance creates access to productive capital for the poor, which together with human
capital, addressed through education and training, and social capital, achieved through local
organisation building, enables people to move out of poverty. By providing material capital to a
poor person, their sense of dignity is strengthened and this can help to empower the person to
the poor to combat poverty on an individual level, it also has a role at an institutional level. It
seeks to create institutions that deliver financial services to the poor, who are continuously
ignored by the formal banking sector. Littlefield and Rosenberg (2004) state that the poor are
generally excluded from the financial services sector of the economy so MFIs have emerged to
address this market failure. By addressing this gap in the market in a financially sustainable
manner, an MFI can become part of the formal financial system of a country and so can access
capital markets to fund their lending portfolios, allowing them to dramatically increase the
Simanowitz and Brody (2004) and the IMF (2005) have commented on the critical role of
microfinance in achieving the Millennium Development Goals9. Simanowitz and Brody (2004,
p.1) state, “Microfinance is a key more members receive loans and after another period of
successful repayment, the final member receives a loan (Ledgerwood, 1999). The concept of
poverty and the impact of microfinance in combating poverty are examined in more detail in the
following section of this chapter. The MDGs are (i) eradicate extreme poverty and hunger; (ii)
achieve universal primary education; (iii) promote gender equality and empower women; (iv)
reduce child mortality; (v) improve maternal health; (vi) combat strategy in reaching the MDGs
and in building global financial systems that meet the needs of the most poor people.” Littlefield,
Murduch and Hashemi (2003) state “microfinance is a critical contextual factor with strong
interventions: it can deliver social benefits on an ongoing, permanent basis and on a large scale”.
Referring to various case studies, they show how microfinance has played a role in
eradicating poverty, promoting education, improving health and empowering women. However,
not all commentators are as enthusiastic about the role of microfinance in development and it is
important to realise that microfinance is not a silver bullet when it comes to fighting poverty.
Hulme and Mosley (1996), while acknowledging the role microfinance can have in helping to
reduce poverty, concluded from their research on microfinance that “most contemporary
They state that microfinance is not a panacea for poverty-alleviation and that in some
cases the poorest people have been made worse-off by microfinance. Rogaly finds five major
faults with MFIs. He argues that they encourage a single-sector approach to the allocation of
notion of poverty is used, there is an over-emphasis on scale, and there is inadequate learning
and change taking place. Wright states that much of the scepticism of MFIs stems from the
argument that microfinance projects “fail to reach the poorest, generally have a limited effect on
income…drive women into greater dependence on their husbands and fail to provide additional
In addition, Wright says that many development practitioners not only find microfinance
inadequate, but that it actually diverts funding from “more pressing or important interventions”
such as health and education. As argued by Navajas et al (2000), there is a danger that
microfinance may siphon funds from other projects that might help the poor more. They state
that governments and donors should know whether the poor gain more from microfinance, than
what exactly has been the impact of microfinance in combating poverty. Considerable debate
remains about the effectiveness of microfinance as a tool for directly reducing poverty, and about
the characteristics of the people it benefits (Chowdhury, Mosley and Simanowitz, 2004). Sinha
(1998) argues that it is notoriously difficult to measure the impact of microfinance programmes
on poverty. This is so she argues, because money is fungible and therefore it is difficult to isolate
credit impact, but also because the definition of ‘poverty’, how it is measured and who constitute
Poverty is a complex issue and is difficult to define, as there are various dimensions to
poverty. For some, such as World Bank, poverty relates to income, and poverty measures are
based on the percentage of people living below a fixed amount of money, such as US$1 dollar a
Livelihood security and microfinance (i) to smooth out peaks and troughs in income and
expenditure; (ii) to invest in businesses/assets including new technology, capital and assets such
as land or housing; (iii) to cope with unpredictable shocks and emergencies such as death and
natural disasters; (iv) to make socially required contributions to lifecycle or community events
material and social resources) and activities required for a means of living.” Chambers states that
livelihood security is “basic to well-being” and that security “refers to secure rights and reliable
access to resources, food, income and basic services. It includes tangible and intangible assets to
and improve its income, assets and social well-being from year to year.” Concern also state that
livelihood security is more than just economic well-being as they define livelihood security as
“the adequate and sustainable access to and control over resources, both material and social, to
enable households to achieve their rights without undermining the natural resource base”
(Concern, 2003).
Livelihood security therefore, like poverty, is not just about income, but includes tangible
and intangible assets, and social well-being. Johnson and Rogaly state that “NGOs aiming for
poverty reduction need to assess the impact of their services on user’s livelihoods.” They argue
that in addressing the question of the impact of microfinance, NGOs must go beyond analysing
quantitative data detailing the numbers of users, and volumes and size of loans disbursed, to
understanding how their projects are impacting on clients’ livelihoods. They state that the
provision of microfinance can give poor people “the means to protect their livelihoods against
A livelihood security approach according to Concern (2003) aims for a holistic analysis
and understanding of the root causes of poverty and how people cope with poverty. They identify
livelihood shocks such as natural disasters and drought, the social, political and economic
context, and people’s livelihood resources such as education and local infrastructure as factors
the objective of this dissertation, a holistic analysis of people’s livelihood security must be
conducted, rather than just focusing on the material/economic impact microfinance is having on
have also deep relation with development. Goals of development emphasize on the reduction of
poverty rather than raising average incomes. All microfinance program targets one thing in
general: human development that is geared towards both the economic and social uplift of the
people they cater for. Tackling poverty has taken a new and broader dimension. Now the
escalating income and savings, and building the asset are not the only means to fight the poverty.
basic hygiene, establishing gender equality etc.68 On the other hand, how these kinds of
income is increased. Without maintaining balance between income and expenditure, it is difficult
to tackle poverty.
Microfinance programs target both economic and social poverty. To assess the success of
their efforts microfinance institutions need to measure the impact on the borrowers. The primary
objective of all MFIs interventions is poverty reduction. Poverty reduction is perceived from the
economic point of view. On the other hand, MFIs interventions promote living condition of poor
people by offering supportive service. These supportive services are important indicators of
human development. The objective of this program is to create sustainable changes in the lives
and livelihood of the poor, women in particular. As a strategy for removing poverty,
microfinance institutions emphasize on improving the health of the poor, which is a main
concern worldwide and particularly in low-income countries, where the burden of disease is
heaviest. The relationship between poverty and ill health has been characterized as synergistic
and bidirectional. Poverty confines the capacity to produce health and ill health leads to further
impoverishment that diminishing the potential of individuals and households to improve their
economic status.
Poverty alleviation strategies (PASs), like micro-credit programs, may pilot to health
benefits. There is a growing recognition that poor health is a dimension of poverty; therefore,
one potential result of poverty reduction is progress in the health of the poor. PASs can adopt
various forms. Debra Lipson’s (1998) review of potentially pro-health PASs included
improve the supply of safe water and basic sanitation. Human development has close relation
with few other development programs, some of them are described below.
Health Program
Health intervention has been an integral part of the MFIs. Different organizations apply
different or similar policy to identify the health problems, undertake rigorous experimentation
and try to explore and then apply suitable, affordable and culturally acceptable technology.
Throughout the work process, they measure and monitor its implementations and recommends
Education Program
Another important goal of all MFIs is to spread the light of education throughout the
society. Development through this program, along with the health program, indicates human
development among the people. Their effort and mission is to build up a society free of poverty,
illiteracy and disease. Their goals are to expand education opportunities for disadvantaged
children and provide them with necessary technical and financial support.
Food Security Program
productivity and off-farm income, thus improving the capability of households to steady their
income and food purchasing power. Food security, at the household level, is defined in its most
basic form as access, by all people at all times, to the food needed for a healthy life (Ghalib,
of Social Impact Assessment. Mohindra, Katherine S.; Haddad, S. (November 2005), “Women’s
Interlaced Freedoms: A Framework Linking Micro credit Participation and Health” Journal of
Human Development)
Profile of Tulay sa
Pag-Unlad Incorporated
(TSPI)
Socio-Economic Impact
Profile of the Respondents
The study used an IVDV model in analysing the variables. The first box was the
independent variables which are the profile of the TSPI Development Corporation, the personal
information of its selected members and the programs and services offered by the organization.
While the second box shows the dependent variable which is the socio economic impact of the
TSPI. Also, we further analyzed and evaluated the problems that are encountered by the
METHODOLOGY
This chapter presented the approach utilized by the researcher in the conduct of the study.
It includes the locale of the study, research design, population sampling, research
instrumentation, data gathering procedure, and statistical treatment of data to attain essential
information.
of Quezon where the livelihood credit assistance program of Tulay sa Pag-unlad Incorporated
Research Design
The researchers employed descriptive type of research design through personal interview
and survey, with the use of structured questionnaire. The personal interview was conducted on
selected administrator of TSPI Sariaya and the survey was answered by the member-respondents.
The descriptive study aims to find the relationship between the dependent and independent
variables. The design is likewise chosen because of the applicability with the objectives of the
of TSPI Development Corporation in Sariaya Quezon. They were mathematically chosen by the
researchers using the Slovin Calculator with 10% margin of error and 90% confidence level to
Research Instrumentation
In order to acquire data and information for this study, the researchers used the interview
guide and structured survey questionnaire. The interview guide questions and survey
questionnaire was constructed and adapted, respectively, by the researchers to meet the
objectives and served as the guideline of the study which was answered by the TSPI
The interview guide questionnaire is divided into two parts. The first part is used to
determine the business profile of TSPI Sariaya branch as to its historical background,
mission/vision/goals, organizational and technical structure. While the second part is used to
determine the technical process involved in the programs and services being offered by the
organization.
The survey questionnaire is divided into three parts. The first part was adapted to
determine the personal information of the members. The second part includes scale and
statements to assess the socio-economic contribution of TSPI programs toward its members. And
lastly, it is all about the possible problems encountered by the members with the institution.
Table 1 show the customer response categories in the second part of the survey
questionnaire. Researchers used a 3-point rating scale with corresponding responses to determine
Assigned
Numerical Rating Scale Response
Value
4 3.25 – 4.00 Strongly Agree
3 2.50 – 3.24 Agree
2 1.75 – 2.49 Disagree
1 1.00 – 1.74 Strongly Disagree
The questionnaires` designs were primarily based on the items from other related studies.
The draft of the questionnaire was presented to the adviser for comments, suggestions and
content validation to improve the structure and organization. The gathered data from the two
Corporation, Sariaya Branch to conduct an interview which can be found in the Appendix A of
this study. After the approval, data was successfully obtained through the personal interview
scheduled in the convenience of the Branch Manager. The survey questionnaires were given to
the selected member-respondents regarding the personal information, services and programs
offered and problems encountered on TSPI. The answered questionnaires were retrieved on the
Statistical Treatment
P = f/N x 100%
Where: P = percentage
f = frequency
N= total number of respondents
Weighted Arithmetic Mean. The formula used to identify the socio-economic impact of
4𝐹 + 3𝐹 + 2𝐹 + 𝐹
𝑊𝑀 =
𝑁
This chapter presents the analysis of the gathered data which are further interpreted to
show the socio-economic contribution of Tulay sa Pag-Unlad, Inc., Sariaya Branch to its
members. Tables and illustrations were presented accordingly to illustrate the data needed.
The profile of TSPI Development Corporation, Sariaya Branch was determined through their
individuals and communities the opportunities to experience fullness of life through small and
responsible and dignified lives, through a broad range of microfinance services for micro and
small enterprises. The business and social development programs promote entrepreneurship
skills enhancement, and address basic needs for healthcare, housing, education, micro-insurance
and other non-financial services that would enhance the opportunities of the poor to get out of
poverty.
TSPI Mutual Benefit Association, Inc. has strong advocacy to provide for a holistic approach
to eradicate poverty resulted to the creation of the TSPI Mutual Benefit Association, Inc. TSPI
MBA is the micro-insurance arm of the TSPI Group of Companies. Since 2007, it has supported
the microfinance activities of the NGO by extending micro-insurance to its members and their
immediate families. Risks covered include accident and life, medical reimbursements, loan
redemption assistance, disability benefits, and other services at a very affordable premium.
In 1981, TSPI was founded by David Bussau of Maranatha Trust (Australia), Kirk Fowler
and Barry Harper of Institute for International Development (IIDI) United States, together with
Filipino civic leaders Aurelio Llenado, Romulo Petines, Dr. Ricardo Jumawan, Dr. Eliseo Pajaro
and Lyn Baldemor. It was registered with the Securities and Exchange Commission on October
20, 1981 as a non-profit development corporation. In 1982, TSPI opened its office at the
Conservative Baptist Association of the Philippines (CBAP) Headquarters on February 15, 1982
with Leigh Coleman serving as Acting Administrator. A month later, TSPI moved to Room 308,
Anita Building Quezon Avenue, Quezon City. Eliseo Lademora, Jr. became TSPI’s first
Executive Director on September 15, 1982. The Small and Enterprise Development Program
(SEDP) was launched and disbursed loan to its first client, Avelino Marciano. In 1984, TSPI was
awarded “Partner of the Year for Job Creation Efficiency and Most Number of Jobs Created” by
IIDI and Maranatha Trust. In 1985, the organization transferred to a permanent office in Padilla
Building in Ortigas, Pasig, Metro Manila. The community-based Small Business Development
Program in Valenzuela and SapangPalay, Bulacan was initiated in cooperation with Philippine
Business for Social Progress (PBSP) and with funding from TEAR Fund of the Netherlands.
TSPI received funding from USAID and Christoffel-Blinden Mission to help enhance its
Entrepreneurship Development Program and to assist enterprises that employ the physically
Then in 1986, TSPI started replicating its services in the countryside through the
HagdansaPag-uswag Foundation, Inc. (HSPFI) in Cagayan de Oro City, and Talete King
Program (Sasakyang Bayan or Transport for the Masses) was launched to enable clients to
purchase tricycles as a source of livelihood. In 1991, the six provincial partners (KMBI, TSKI,
ASKI, RSPI, HSPFI and TPKI), together with TSPI, formed an umbrella organization called the
Program anchored on a wholistic and Biblebased framework was launched. In 1992, the
Kabuhayan (Livelihood) Program was launched. TSPI received hands-on training, technical
and advocates, known as the Philippine Coalition for Microfinance Standards, to craft a set of
performance standards that will guide the transformation of non-government organizations into
viable and sustainable microfinance institutions. TSPI moved to the new Headquarters at 2373
Antipolo St., Guadalupe Nuevo, Makati City. In 2000, TSPI received the “Overall Performance
and support partners, based on repayment rate, client outreach, average loan size, operational
organizing the Microfinance Council of the Philippines (MCPI), a local coalition of microfinance
practitioners and support partners. An individual lending program called the Association for
When 2001 came, TSPI Kabuhayan graduation program (TKP 2) was launched, featuring
larger loans for creditworthy clients with growing enterprises. TSPI pioneered the release of
loan to its clients through the automated teller machines of Landbank of the Philippines and
Bank of the Philippine Islands. In 2002, the TSPI Multipurpose Cooperative was founded and
registered with the Cooperative Development Authority (CDA) in January 2002. In 2004, TSPI
was recognized as one of Grameen Foundation USA’s High Growth Partners. It received a
“Certificate of Achievement for the Most Number of Clients” among Opportunity International
International Australia and received its first grant to support MIS enhancement and branch
operations in Baliuag, Bulacan; Noveleta, Cavite and; San Fernando and Balaoan, La Union.
TSPI established its 55th branch and achieved the 100,000 client outreach. TSPI was recognized
(Metro Manila Southeastern District). Mr. Ruben C. de Lara, then TSPI Executive Director, was
elected President of MCPI. In 2005, the TSPI Palayan Program was launched to provide farmers
access to microcredit, technical assistance and the latest technology in rice farming.
TSPI received funding from the Consultative Group to Assist the Poor (CGAP) for the
conduct of institutional rating by CRISIL, an international rating agency and a partner of the
world’s largest rating agency Standard & Poors. It was given a rating of 2 on a scale of 1 to 8,
reflecting its long track record, superior governance practices and robust systems, processes and
control instituted by management. TSPI received the “Five Diamond Rating” on transparency
microfinance institutions, 68 funders and 113 market facilitators around the world. TSPI earned
the distinct privilege of being the first microfinance NGO accredited by the Philippine Health
Insurance Corporation (PhilHealth) to act as conduit that will link the poor to health insurance
benefits.
In 2006, the Social Housing Program was launched in partnership with Habitat for Humanity
to provide clients access to loans for house construction and repair. TSPI Mutual Benefit
Association (MBA) obtained its license to operate from the Insurance Commission. Through the
MBA, TSPI is able to provide its clients and staff better life insurance coverage. In 2007, TSPI
MBA launched its Life and Mortgage Redemption Insurance for TSPI borrowers and micro-
insurance for all poor. Housing and Sanitation Loan Program was launched and rolled out to
serve clients in Metro Manila and in the provinces. Total assets reached P1 billion in October
2007. In 2008, TSPI led the advocacy for the passage of the “Microenterprise Development
Institution (MEDI) Act”, which aims to provide microfinance NGOs a legal framework for
adopting a holistic approach to poverty eradication that shall govern NGO-MFIs as social
development institutions. TSPI was awarded as the “Best NGO” by Pangasinan province. It
ranked 61st in the “Top 100 Microfinance Institutions in Asia” by the Asian Development Bank
and the Microfinance Information Exchange. TSPI’s total loan portfolio reached P1 billion in
December 2008. In 2009, the first water refilling station (WaterHope) and Community Center
was opened in Signal Village, Taguig City, offering safe and affordable drinking water for poor
households in the area in partnership with Wholistic Transformation Resource Center (WTRC)
and TSPI Multipurpose Cooperative. TSPI opened the first two branches in Mindanao:
Malaybalay and Valencia branch in the province of Bukidnon. The Relief and Rehabilitation
Program is formed to support 56,000 clients and staff adversely affected by Typhoons Ondoy
and Pepeng in Luzon with P17.6 million donations generated from the Board, Management, staff
As of now, TSPI Development Corporation has 150 branches including its sub branches and
continuously expanding its services to the poorest. It has established 16 branches with 5 major
branches in Quezon Province which are Candelaria, Calauag, Gumaca, Lucena and Sariaya
TSPI Development Corporation, Sariaya Branch was established on 2008, revealing its
nature as a branch offering TSPI Kabuhayan Program (TKP) and TSPI Micro insurance. Under
TKP program, it offers four loan programs (Hog Fattening, Education, Multi-purpose, Housing
and Sanitation Loan Program) while the TSPI mutual benefit association offers the micro-
insurance benefits. Among the twelve (12) Microfinance Programs that TSPI Development
Corporation offers in its different branches in Luzon, it also offered services such as Insurance
and Medication. The branch is continuously expanding its program and services to a growing
number of members. Sariaya Branch is continuously providing its programs and services in
Mission
Vision
To see people live Christ centered lives with dignity, sufficiency, integrity and hope;
demonstrating this through love and service in their families and communities
As an ecumenical organization, TSPI stands by the four (4) Core Values of:
Integrity – one doing what is right despite the cost even when no one is looking.
Stewardship – each one taking responsibilities as faithful rewards.
Through its works, TSPI hopes to pass on these values so clients can realize fullness of
its Branch’ Organizational Structure showing only three levels of authority and responsibility.
Sariaya branch has one (1) Insurance Officer; one (1) Senior Account Officer; two (2)
Branch Accountants; eight (8) Account Officers, that holds and organizes approximately one
hundred sixty-six (166) Centers; and a Branch Manager, that reports monthly to the Head Office.
Branch Manager (BM) – He is the overall in-charge as the operating head of the branch. He
plans, directs, organizes and supervises programs to attain the company’s objectives. He
monitors and evaluates the activities of the branch employees. The manager is also responsible
for the approval and disapproval of Loan Releases, Checks, as well as Check Voucher. Also, he
is the one who establishes and sustains good customer relationship and rapport to the clients. He
lists and evaluates the credibility and knowledge of the clients about the program through the
Branch Accountant (BA) – He prepares the Cash Collection Sheet, Checks and Check Voucher.
He is responsible for the recording of the daily transactions, keeps and controls of all accountable
forms. The accountant also prepares the Cash Collection Report and the Financial Statement of
the Branch.
Senior Account Officer (SAO) – The Officer-in-Charge in the absence of the Branch Manager.
He is responsible for the custody of Petty Cash Fund and Replenishment and the releases of
Passbook and ID’s of the members. He is also responsible in the loan processing including the
Insurance Officer (IO) – The officer who checks the completeness of MBA Forms and
Requirements submitted by the members. Also, he is the one who gives the Micro-insurance ID’s
Account Officer (AO) – These are officers who are usually seen in the field centers or
barangays in the conduct of weekly Center meeting to inspect and update the Passbook of the
clients. The officer who conducts the personal interview and investigates the credit background
of the client. They also maintain the accounts and ensure the regular collection of payments by
checking the DS of the Center and prepare the Passbook and ID’s of the members.
1.4 Technical Structure
Technical structure presents the framework of TSPI, Sariaya Branch. It shows the
Figure 3 shows the vicinity map where Tulay sa Pag-Unlad, Inc., Sariaya Branch is
located. The office building is located along General Luna and Padre Burgos Street.
Figure 4 presents the office layout of Tulay sa Pag-Unlad, Inc., Sariaya Branch.
Whenever you enter into the office, the accounts and insurance officer are there to entertain the
queries of the members. The table is used for conducting meetings and the layout also shows that
each of the employees had their own table inside the office.
TSPI caters to poor women and men with existing enterprises and even to those without
existing enterprises as long as they possess potential entrepreneurial or technical skills and
demonstrates a desire to grow themselves, their enterprises and their communities in general.
2.1 Programs and Services Offered
Programs
collateral-free loans of up to P30,000 payable from three to six months on a weekly basis. To
qualify, individuals must join other borrowers to form a group with five to thirty members.
Group guarantee is required for loans, as a way of instilling credit discipline and to foster group
solidarity. Members are also provided with micro-insurance benefits and access to other loan
programs.
Housing and Sanitation Loan – is a loan facility for housing, toilet and water
The maximum loan amount is P20,000 payable in three to six months, with
weekly repayment. Special training courses for clients and immediate family
TSPI Microinsurance – are offered to the employees, members and their immediate
families through the TSPI Mutual Benefit Association, Inc. to help cushion the adverse effects of
Benefits Sum Insured for Sum Insured for Sum Insured for the
Member Husband/Wife Children (4 max)
Death Benefit P10,000.00 P5,000.00 P10,000.00
*P2,500 per child
Accidental Death P10,000.00 P5,000.00 N/A
Benefit
Total and Permanent P10,000.00 N/A N/A
Disability
Equity Value 50% of the N/A N/A
contribution will be
received after 3 years
of membership
Services
Values Formation
Leadership Skills
Community Development
Qualified Borrowers:
members).
A resident of the same barangay (area of the Center) for at least two years.
Must have the capacity to pay based on Center Evaluation (with 100% repayment
rate).
20% growth in capital for reloan with 80% attendance in Center meetings
(conducted weekly).
Should attend the one (1) day Branch Orientation and Recognition.
Birth Certificate
Barangay Clearance
A. Mode of Payment
Payment of loan (instalment) must be made weekly and all the collections must be
deposited in the designated bank of TSPI which is Land Bank of the Philippines.
B. Maximum Loan Amount
Based on the “9 Principles of TKP” number 3 and 4 (for TKP Loan which is refer to as
the ‘General Loan’), which is a discipline and needs of the business as well as the
capacity to pay.
Offers special loan such as: Multi-Purpose Loan (for any use to prevent loan diversion);
Hog Fattening Loan (for piggery); Housing Loan; and Educational Loan. These loans are
offered only to clients that show excellent loan performance (as rated by the Account
C. Interest Rate
D. Minimum Savings
New Member: P60.00 weekly payment (4 weeks) for “pasasalamat fund” with a total
amount of P240.00.
Active Member: weekly savings of P60.00 (may increase upon members desire for more
savings)
total savings)
Loan Releases – Upon the completion of Center Collection during the Center meeting, all
members who applied for a loan will be informed regarding the loan approval. Members
whose loans have been approved will go directly to the Branch office where loans will be
released with the provision of SSR and a promissory note which indicates the
accountability of the borrower. Approved Loans will not be released if the cash collection
collection for the week. The required collection is based on the Center’s responsibility as
Collection – The Branch has three ways to collect weekly amortization: “One-day before
policy” which means that each Center should pay one-day before the Center meeting and
deposit the collections on the designated bank of the branch; “During the Center
meeting” the borrower who does not pay one-day before should pay their weekly due
during the Center meeting before the Bank hours ended at 3 o’clock in the afternoon. The
collection should be deposited by the Center treasurer and attaches all the DS in the
Center Collection Sheet which indicate the entire weekly amount due of each borrower
within the Center; and the “Follow-up Cash Collection’ in which the members of the
Center are responsible to pay for the uncollected accounts for the week before the next
Center meeting as stated in the pledge for each TKP members which is ‘to help their co-
members who are temporarily incapable to pay for the due’. The members of the Center
monitoring the members of each Center. They monitor each member through the conduct
minimum of 20 members. They should evaluate the attendance of the members as well as
their performance of payment. Members’ passbook will also be updated as well as the
Center Evaluation is a useful tool used to monitor which of the Center is in serious defaults
of payment and those Centers will be given more attention to help them upgrade their
performance.
3. Approval of Loan Proposals by the Members of the Center during Center Meeting.
5. The AO will then forward the proposal to the SAO for evaluation (completeness of the
loan forms, validity of the members’ signature and rate of performance of the members
6. Submission of the evaluated Loan Proposal to the BM for notification and final approval.
8. Loan Release at the Branch office with the provision of a promissory note.
The profile of the member-respondents was determined based on their demographic and
membership profile.
Table 3 presents that majority of the members comprising of 89 or 92.71% are females in
contrast to males who are composed only of 7 or 7.29% of the total population. The context
implicates the same result as the Asian Development Bank (2007) which summarizes that vast
majority of the microfinance clients and beneficiaries are female. Evidence shows that women
Table 4 shows the respondent’s profile in terms of their age where majority of them are
within the bracket of 42 years old and above with 48 or 50%. It is followed by age ranges of 30
to 34, 36 to 41 and 24 to 29 where each had 23, 19, and 6 respondents which is equivalent to
The data implies that most of the members of TSPI, Sariaya Branch belongs to the older
age which implicates the study of Kilambo (2015) in study of credit services the majority of the
Table 5 disclosed that most of the members of TSPI Sariaya are married comprising of 77
or 80.21% of the total number of respondents. It is followed by those who widowed, legally
separated and lastly single which comprises 10, 5 and 4 and equivalent to 10.42%, 5.20% and
4.17% respectively.
The study showed similar results in the study of Njeri et al. (2013) on the majority of
indication that married people are the ones actively involved in the negotiation with
microfinances.
59.38%. It is followed by 4-6 dependents with 34 or 35.42% and the least with more than 6
dependents with 5 or 5.21%. This connotes that majority of the members have considerable
number of dependents which made them enter in microfinance institution to venture business for
additional income.
Table 7 reveals that in terms of the highest educational attainment of the members of
TSPI Sariaya, the highest are those who reach High School level having 54 or 56.25%. It is
followed by college level with 22 or 22.92%, elementary level with 16 or 16.67% and the least
The outcome of the study is also similar on the study of Kondo (2007) which shows that
the high school graduate are the most common members of the microfinance institution. He
implied that income from high school graduates is significantly positive and rising. This
implication reveals that majority of the respondents have ability to settle their financial
Table 8 displays the respondent’s profile in terms of income where it is very evident that
the frequency and percentage shares along with income brackets are not widely dispersed. Hence
out of 96 respondents, 38 or 38.52% gain more than P9000 which is immediately followed by 29
or 30.21% who earn 3000-6000 per month, followed by 16 or 16.67% having salary of 6000-
9000 monthly and the least is those respondents who earn lower than 3000 a month with 14 or
14.58%.
The study revealed similar result as the study of Monzur et al (2016) on the impact of
microfinance on household income. He discussed that microfinance members are poorer than
non-members but participation in this institution have positive impacts in which one percent
increase in the duration in microfinance is associated with the lower probability of being poor.
related to trading with 42 or 43.75% followed by services and other livelihood not stated on the
choices which gain 20 or 20.83% and the least number of members are into production with 14
or 14.58%. The results imply that most of the members are into small scale-enterprise which in
turn boils down to the fact that those who avail assistance of TSPI have small businesses.
With regards to the nature of membership, most of the respondents have been part of the
TSPI Sariaya for more than 5 years (61 0r 63.54%), followed by 1-2 years of being member (20
or 20.83%) and the least 3-4 years (15 or 15.63%). The study implies that majority of the
members are satisfied and are likely to have positive and long term relationship with the
organization.
To evaluate the socio-economic contribution of TSPI to its members, sets of questions were
Weighted Qualitative
Basic Needs
Mean Description
Average Weighted
3.14
Mean Agree
The table shows the impact of TSPI Programs and Services on the members of the
institution in terms of basic needs. It was shown from the topmost mean score that the
respondents strongly agree that TSPI enables them to provide food for their family, while the
lowermost mean score shows that the respondents agree that it helps them provide better clothing
for their children/themselves. Generally, it can be inferred that the respondents agree on the
impact of TSPI Programs and Services on the members of the institution in terms of basic needs.
Weighted Qualitative
Business Capital
Mean Description
Average Weighted
3.37
Mean Strongly Agree
The table shows the impact of TSPI Programs and Services on the members of the
institution in terms of business capital. It was shown from the topmost mean score that the
respondents strongly agree that TSPI encourages them to establish their own business;
correspondingly the lowermost mean score shows that the respondents strongly agree that TSPI
provides capital for their business to help them generate higher income. Generally, it can be
inferred that the respondents strongly agree on the impact of TSPI Programs and Services on the
Weighted Qualitative
Social Relationship
Mean Description
Average Weighted
2.88
Mean Agree
The table shows the impact of TSPI Programs and Services on the members of the
institution in terms of social relationship. It was shown from the topmost mean score that the
respondents strongly agree that they frequently socialize with other members from other
barangays/areas, while the lowermost mean score shows that the respondents strongly disagree
that there ever been a serious dispute within the group. Generally, it can be inferred that the
respondents agree on the impact of TSPI Programs and Services on the members of the
Weighted Qualitative
Impact to the Society
Mean Description
Average Weighted
3.33
Mean Strongly Agree
The table shows the impact of TSPI Programs and Services on the members of the institution
in terms of impact to the society. It was shown from the topmost mean score that the respondents
strongly agree that TSPI primarily reach the poorest people, while the lowermost mean score
shows that the respondents agree that TSPI create new employment opportunities in the society.
Generally, it can be inferred that the respondents strongly agree on the impact of TSPI Programs
and Services on the members of the institution in terms of impact to the society.
None 82 85.42%
Total 96 100.00%
The table shows the problems encountered by the members in TSPI programs and
services. It was shown that the topmost mean score labelled none which means that there was no
serious problem experience followed by those who have a difficulty on repaying the loan. The
lowermost mean score shows that they encountered employees who are not approachable.
Generally, it can be inferred that the respondents were satisfied to the performance of TSPI as to
Based on the data gathered, the researchers come up with the following findings and
conclusions.
Summary
Pag-unlad Incorporated, Sariaya Branch to its members. Specifically, this study was aimed to
accomplish the following objectives for them to know also the problems encountered by the
members of TSPI relative to its programs and services and for them to improve their
performance at the end of this study. First, it sought to determine the business profile in terms of
specifically the vicinity map and office layout. Second, is to identify the microfinance operations
provided by the business in terms of their programs and services, access to credit and lending
evaluate the degree of socio economic contribution of the business to its members through the
basic financial needs, return on the member`s investment, social relationship and impact to the
society. Fifth is to know the problems encountered by the members of TSPI relative to its
program and services. Researchers obtained information through personal interview from the
manager of Tulay sa Pag-unlad Inc., Sariaya Branch. Moreover, the researchers limit their
respondents to 96 members out of 2400 population through the use of slovin calculator with 10%
margin of error. The researchers used descriptive research design and the instrument utilized is a
structured questionnaire. The first part includes the demographic and membership status of the
member-respondents. In the second part, the researchers used the 3-point rating scale which
became the basis to measure the socio-economic contribution of TSPI to its members. The last
part presents the problems encountered by the members to TSPI programs and services. For the
data analysis, the researchers evaluated the data through the use of frequency and percentage
distributions and also the weighted arithmetic mean to measure the socio-economic contribution.
The researchers obtained the result of the data with the help of statistician.
Findings
The researchers signified the following findings obtained from the analyzed interpreted
data.
TSPI, Sariaya Branch was then before a sub-branch of TSPI, Lucena Branch. Then, after
a couple of years, it was transferred to Gumaca Branch. In 2008, TSPI finally established its
own branch in Sariaya. The branch manager is the one who supervised the operation with the
help of the officers (Account, Senior Account, Insurance Officer and Branch Accountant). It
was located along General Luna and Padre Burgos Street. TSPI is affiliated with three
companies that offer related services to TSPI clients and employees. These are the TSPI
Mutual Benefit Association, the TSPI Social Enterprises, Inc., and the TSPI Employees
Cooperative. Additionally, TSPI works in partnership with a growing list of donors, and is
There are two programs offered by the TSPI. One is called TSPI Kabuhayan Program
(TKP) and the TSPI Microinsurance. The age of the applicants must be 18-60 years old and
are at least 2 years resident of their town. TKP consists of four loan programs namely; Multi-
purpose, Educational Assistance Program, Hog Fattening and Housing and Sanitation Loan.
3. Member-Respondents Profile
Majority of the members of TSPI, Sariaya Branch were female. As to age, most of them
are 42 years old and above. As to the educational attainment, most of them reached high
school level. As to civil status, majority were married. As to number of dependents, most of
the members have 1 to 3 children. As to the nature of membership, majority of them were
members for more than 5 years. As to the estimated income, predominantly of the members
earned more than 9000 monthly. As to the livelihood program, majority of them were
engaged in service.
In the business capital, first statement resulted highest weighted mean of 3.47 which
represents that TSPI encourages members establish their own business. As to the basic
financial needs, the first statement gained highest weighted mean of 3.48 which revealed that
TSPI helps the members in providing food for their family. As to the impact to the society,
first statement resulted weighted mean of 3.63 and disclosed that TSPI primarily reach the
poorest people. In the social relationship, the last statement obtained the highest weighted
mean of 3.39 which represents that the members frequently socialize with other members
TSPI Sariaya Branch members encountered two common problems in the operations: (1)
difficulty in repaying the loan and (2) employees are not approachable but not as serious and
For the overall performance of TSPI Sariaya Branch and in accordance to the evaluation
to its members, it showed that TSPI provides quality programs and services that reach their
objectives.
Conclusion
Majority of TSPI, Sariaya Branch members were female, 42 years old and above,
married, have 1 to 3 children, high school graduate and were engaged in service with estimated
earnings of more than P9,000 monthly. The socio-economic contribution of TSPI to its members
in terms of basic financial needs and social relationship resulted agree while in business capital
and impact to the society resulted strongly agree on its positive contribution. It shows that TSPI,
Sariaya Branch is committed on meeting its objective of helping the members by increasing their
economic and social status. Moreover, in terms of the members’ nature/duration of membership
majority of them are members for more than 5 years. It implies that members have found
valuable reasons to stay and to continue dealing with the microfinance institution. There is also
two common problems encountered by the members which are insolvency and employee-related
issues but there is no as serious as other microfinance institutions are experiencing. With this
information, the researchers’ concludes that TSPI has a positive socio-economic contribution to
its members, however, it is still a continuous challenge for the organization to create more
valuable programs and services for a life-long relationship with the members.
Recommendations
In this light of the findings and conclusions made by the researchers the following are
recommended:
1. Their collection policies are well established but the possible consequences that may
occur in the succeeding years is also a factor that needs attention even if the institution is
2. The branch may suggest to the Head Office about the review and further study of
establishing the TSPI Bank; this will contribute to the institution’s ability to improve
more loans in a more efficient way as well as being more profitable. The materialization
of this plan will strengthen the ability of every branch to be financially sustainable. The
branch will not incur more expenses on interest if the Mother Institution will establish its
own bank.
3. They could make a proposal to the Head office for adopting the ATM Loaning System
like the other branches in Manila to be able to provide better loan transactions with lesser
time and efforts of the members and at the same time reduce the use of manual loan
operations that will lead to lower personnel expenses which indeed will result to a higher
level of sustainability.
4. The TSPI, Sariaya Branch may consider the members problems which results to dropouts
(maybe intentionally or unintentionally quit as a member of the Center) making their loan