“Give man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime,” says the popular Chinese proverb. But how can a man fish if he does not have the necessary tools? 2008 Ramon Magsaysay Awardee CARD-MRI has been lending millions of Filipinos microloans so they can invest in tools for them to fish, and for them to live economically independent lives.
Though love makes the world go round, it is money that prods it forward. That money must reach down to the poorest of the poor for the world to go well. The successful effort to open up access of resources to the bottom rung of the economic ladder is behind the conferment of the 2008 Ramon Magsaysay Award for Public Service on CARD-MRI, the group of five poverty-alleviating institutions led by Dr. Jaime Aristotle Alip.
CARD MRI stands for the Center for Agriculture and Rural Development-Mutually Reinforcing Institutions, five organizations with a microfinance NGO at its core, responding to basic economic needs of landless rural workers. These are livelihood and financing, insurance, training, and assistance in business development.
CARD Inc. provides the basic support and financing, CARD-MBA (Mutual Benefit Association) provides the insurance coverage, CARD Bank is the microfinance- oriented rural bank that facilitates savings and loans, CARD-MRI Development Institute provides training needs, and CARD Business Development provides financial support services to nurture its clients’ businesses.
CARD MRI grew out of the vision and leadership of its founder, Aris Alip, and the dedicated hard work of its pioneering management: Aristeo A. Dequito, Dolores M. Torres, Flordeliza L. Sarmiento, and Aris’ wife Annie. For ten years, Aris worked with the Philippine Business for Social Progress (PBSP). There, he saw that neither the PBSP nor other groups extended assistance to landless farmers. In December 1988, he left PBSP to organize CARD. The concept was to assist landless rural workers, initially in Quezon and Laguna, by organizing small and viable grassroots organizations. The members would be trained and supervised in planning, implementing, and evaluating their own livelihood projects.
To lend money to the poor, one must have money. Aris sent his cousin Boy Dequito, CARD’s first employee, to buy P20 worth of office supplies. The office was a room in the vocational school owned by Aris’ father. One of those proposals they sent was to the Asian Community Trust, a Japanese NGO. Its Secretary-General at the time, Mr. Takayoshi Amenomori, was an acquaintance of Aris’. To follow up, Aris flew to Japan with borrowed funds and his own business suit. Discovering that Aris was actually sleeping in the airport and noticing the one business suit Aris wore repeatedly, Mr. “Taka” worked on two organizations to give CARD its first grant.
It was US$20,000 (approx. P440,000 at the then prevailing exchange rate of US$1:P22), to be used for providing technical training and credit assistance to two hundred landless rural workers. With this first program support, CARD organized the landless rural workers into associations of 15-20 members each and provided training interventions on project management and organization development. Then the lending program for members started with loans ranging from P1,000 to P5,000 (P45-P225).
Other projects ensued, such as cow dispersal and deep well installation. Then CARD got another grant, from another Japanese NGO, the Karaimo Kouryu Foundation, whose thrust was a people-to-people exchange program. This seed fund enabled CARD to put up its training center in Bay, Laguna. In fact, CARD’s first income was a training engagement commissioned by Plan International for their farmer-cooperators in Banaud, Mindoro. The groundbreaking led to attention and support from other donor agencies, among them the UNESCO, Catholic Relief Services, and the German Savings Bank Foundation.
The ball started rolling, but sometimes it seemed to wobble towards near-disaster. CARD did not have a well-defined target market, nor a lending strategy with systems that would ensure repayment. The members were allowed to decide when to pay their loans. Thus, of the first seven groups given loans, only two repaid on time.
Aris and his team reviewed their way of lending. There are a few established microfinance methods: traditional lending where the lender has no involvement with the borrower’s business; the Grameen Bank approach, and the ASA Approach (developed by the Association for Social Advancement in Bangladesh).
In late 1989, CARD pilot-tested the Grameen method and found it viable. It was later refined in the course of operations and used for years, as CARD expanded beyond Laguna to Quezon Province, Marinduque, and Mindoro.
One sea change was the shift to lending exclusively to women, and regular weekly meetings at which loans repayable in weekly installments over a one-year period were repaid. This was all part of the Grameen credit delivery system.
In 1998, client numbers were dropping, turned off by the group liability policy of Grameen. People did not want to be responsible for somebody else’s arrears. Aris then adopted the ASA method which kept the group approach to lending but had an individual liability scheme. They were back in business.
Encouraged by its success, CARD looked at scaling up operations and ensuring sustainability. It improved access to bigger loan amounts. It tightened management and decentralized decision making, putting up area offices in Marinduque, Masbate, and Mindoro. By 1997, CARD had grown to 13 branches while maintaining high repayment rates of 98-99%, and increasing administrative efficiency. It boasted a loan balance of P52 million.
Aris decided it was time to transform the NGO into a bank, a formal microfinance institution, as CARD needed more access to long-term funding and would anyway eventually have to be registered as a financial institution. On September 1, 1997, CARD Bank opened as a Central Bank-licensed rural bank in San Pablo City. In July 1998, it sold and assigned bank shares to its qualified members.
The CARD Mutual Benefit Association, was an offshoot of the Members Mutual Fund introduced in 1994 to cushion members from the shocks of unforeseen events. CARD MBA is a microinsurance company, owned and managed by its member clients now numbering 400,000 households and insuring close to 2.5 million Filipinos. Of the approximately 12 million insured people in the Philippines, CARD-MBA covers at least 14%, insuring more individuals than major commercial insurance companies. Funded by CORDAID, CARD-MBA now also helps other microfinance institutions put up their own microinsurance organizations.
CARD-MRI’s training spoke is the CARD MRI Development Institute which started out in 1989 as the CARD Training Center in Bay, Laguna. The Institute now boasts a fully-equipped training center with meeting rooms, dorm-type airconditioned rooms, AV equipment, sports facilities, and services.
The most recent but foreseeably not final component of the CARD MRI is the Business Development Service Center, which was set up to help CARD members move their goods to market. The CARD-BSDC is the mechanism that assists clients with technology sharing, planning and research, supply sourcing, and logistics until the project becomes viable and sustainable.
In brief, within the space of slightly more than a decade, the CARD MRI leadership managed to build a system of institutions capable of responding effectively to the principal needs of the landless rural poor. A CARD MRI manager attributes its success to the vision, hard work, and perseverance of the institution’s leadership. CARD’s leadership point to the work of the technical officers as responsible for the success of CARD NGO. Aris himself cites the coordinators working as feedback agents for the technical officers, as the reason for the success of CARD MBA. The key to CARD MRI’s success is just that— everybody’s effort. The team has helped close to half a million families.
The early 90’s were a personally trying time for Aris who was also head of a family with three growing sons to put through school. Forced by financial demands, he took a job in Vietnam which still allowed him to help with CARD operations. In his absence, his co-leaders such as Dolores M. Torres, Boy Dequito, and Ma. Luisa Cadaing, stepped forward. In 2000, while he was at the DSWD, CARD performance suffered and Aris took the blame. He almost gave up then. His team soldiered on as he struggled with uncertainty before turning around with renewed conviction to carry on. In that same year, Aris refused a US%15,000/month offer to open a microfinance bank in East Timor, deciding to stay with CARD. He has paid a much higher price than that for CARD’s success. CARD has set foot in Cambodia and intends to further reach beyond boundaries in quest of its mission: to build sustainable, financial and capacity-building institutions owned and led by socially and economically-challenged families. Mission accomplished.