The other day I met with the finance committee of the Foundation composed of Dr. Pomie Buot, Myrna Angalot-Lu, Joy Arac and Joal Velas. They were worried that BLDF might not be able to pay back the loan amounting to the creditor by the end of this year. It was the same story as last year. Same problem - those who took out micro-loans, ranging from Php 5,000 to Php 15,000, have not been paying. Same faces. And, probably, same solution, I was telling myself as I listened to their woes.
Same reasons were given for the non-payment of the loans: the cooperatives could not sell their produce; there was no fish caught or no farm produce because of bad weather; the money was spent for tuition fees, medicines and other emergencies; they just could not pay, period.
The community organizer who serves also as collector of payments said the clients were getting harder to deal with. Some dared him to call the police and arrest them, knowing that this was against the law; others were just plain non-committal and would not give any pledge when they would pay; majority of them would give dates when they would pay the loans but from their past behavior you know they would not honor their word.
And so what to do? A number of options were again listed down, the same that were in those lists in countless meetings before, none of them worked: let them sign promissory notes; charge them in small grants court; get them to pay in kind, e.g. getting part of their harvest of rice, tomatoes, fruits, etc. None of these worked in the past; hence, how could these strategies work now?
We seemed to be running of options. Same analysis of previous lapses: we did not apply due diligence in the the choice of debtors; we listened more to our partners about the selection of project sites which made us operate in places too far and expensive to reach; some of those who took our loans were approved by former employees, who are no longer around.
Meanwhile, we have to maintain the collector in terms of monthly salary, fuel allowance for the motorbikes, food.
Most likely, we will again look for sources, other than the debtors, to pay back the loan. Same solution as last year. It is an expensive to pay for the lapses. We did not anticipate this kind of misbehavior, some of them we know have the capability to pay. Could it be that social values are shifting, people no longer honor their word? When they came, they were really quite dramatic in their depiction of their hapless situation. When it was to collect, they either disappeared or they pretended it was the first time they were meeting the collector.
The sad part is that there is no resource institution or agency we could turn to and tell our story. Success stories are what they tell each other during workshops which sound like fairy tales to us. How did the other NGOs manage their microfinance facility? What have been the lessons learned? This non-payment of loans, is this a common experience? Nobody seems to care and we are left on our own to solve this puzzle.
Chances are, the finance committee will again borrow money from their respective families and other sources of credit. Yes, we will end up poorer than the farmers and fisherfolk we have been trying to help.
Sad but true.
Same reasons were given for the non-payment of the loans: the cooperatives could not sell their produce; there was no fish caught or no farm produce because of bad weather; the money was spent for tuition fees, medicines and other emergencies; they just could not pay, period.
The community organizer who serves also as collector of payments said the clients were getting harder to deal with. Some dared him to call the police and arrest them, knowing that this was against the law; others were just plain non-committal and would not give any pledge when they would pay; majority of them would give dates when they would pay the loans but from their past behavior you know they would not honor their word.
And so what to do? A number of options were again listed down, the same that were in those lists in countless meetings before, none of them worked: let them sign promissory notes; charge them in small grants court; get them to pay in kind, e.g. getting part of their harvest of rice, tomatoes, fruits, etc. None of these worked in the past; hence, how could these strategies work now?
We seemed to be running of options. Same analysis of previous lapses: we did not apply due diligence in the the choice of debtors; we listened more to our partners about the selection of project sites which made us operate in places too far and expensive to reach; some of those who took our loans were approved by former employees, who are no longer around.
Meanwhile, we have to maintain the collector in terms of monthly salary, fuel allowance for the motorbikes, food.
Most likely, we will again look for sources, other than the debtors, to pay back the loan. Same solution as last year. It is an expensive to pay for the lapses. We did not anticipate this kind of misbehavior, some of them we know have the capability to pay. Could it be that social values are shifting, people no longer honor their word? When they came, they were really quite dramatic in their depiction of their hapless situation. When it was to collect, they either disappeared or they pretended it was the first time they were meeting the collector.
The sad part is that there is no resource institution or agency we could turn to and tell our story. Success stories are what they tell each other during workshops which sound like fairy tales to us. How did the other NGOs manage their microfinance facility? What have been the lessons learned? This non-payment of loans, is this a common experience? Nobody seems to care and we are left on our own to solve this puzzle.
Chances are, the finance committee will again borrow money from their respective families and other sources of credit. Yes, we will end up poorer than the farmers and fisherfolk we have been trying to help.
Sad but true.
It seems to me that you have no other way out but to absorb the bad debts and come out poorer than the poor you tried to help. If indeed, they are poor. Really sad. This is one glaring instance how development could sometimes be a thankless job. I wish I had some possible solutions to brighten up your day. But I do not have any.
ReplyDeleteHere, there are a number engaged in "lending" activities. They have less problems because the lenders themselves do the collection daily. No overhead cost plus a greater assurance of repayment because the lenders are sure to give borrowers a mouthful in public should the latter fail to pay.
Much thanks for your comment. We have not lost hope. Our collector must still visit regularly those who have not paid. We have rejected the option of "shaming" them by staying in their homes until they pay up. Still we try to show that if they pay, others will also benefit. This is going to be a long process and quite expensive on our part, but we have rejected all the other options, e.g. filing cases in court; getting their TV sets, or whatever is equivalent to the loans. I hope they will eventually find the good heart to pay us back. Meanwhile,we focused on paying back what we owe. Same story all over again.
ReplyDeleteThanks for your concern. It comforts us at this critical hour in the history of our Foundation. With your prayers, we shall overcome.