Micro-financing in the Philippines: Ur Van Ur Business

Daniel Bonifacio has gone a long way from cleaning rooms and mopping floors of a commercial bank. That was P77,000 ago.

Nowadays, the former janitor is busy with his sari-sari store and wholesale business, put up with micro-financing through the Center for Community Transformation Credit Cooperative or CCT.

"I have four kids and I believed then I could not put them through school with a janitor's salary," Tatay Daniel says.

"So I started selling fruits with P700 in capital, which was not enough," he relates. "Fortunately, I was able to join CCT and was allowed to borrow P2,000."

Tatay Daniel expanded his product line to charcoal and other articles that the urban poor like him needed.

"I took good care of that first loan, paying diligently because I know that's the way for me to stay in business," he says. "Later on, I was able to borrow P5,000."

Second loan

That second loan made it possible for him to put up a sari-sari store and religiously he paid the loan, hoping for bigger opportunities.

Tatay Daniel is tending to another financing package worth P70,000, an amount he vows to pay as faithfully as he did the previous ones.

"Because of the loans and with the Lord's blessings, one of my kids has already earned a degree," he says. "Two more are still in college and my youngest is in high school."

Elizabeth Veñegas, head of accounting at CCT, describes the group as a Christian development organization (although she clarified that they are not out to convert people into a congregation).

Organized in 1992, CCT "promotes holistic transformation through the provision of community-based, integrated and sustainable programs and services that include micro-finance, education for children, spiritual development, servant leadership training and development, business and social services, and socio-cultural enhancements."

Loan packages

Veñegas says CCT had released this year some P1.4 billion by means of about 200,000 loan packages ranging from P3,000 to P200,000.

Usually, borrowers are extended small loans that they must pay in weekly installments. The amount of a loan one is qualified to draw on depends on his or her track record of repayment.

"The average loan is worth P6,000 but we were able to serve borrowers who needed more than P20,000 through the help of Universal Motors Corp.," she says.

UMC is actively helping CCT's micro-financing program through its "Ur Van Ur Business" entrepreneurship campaign that was launched in March 2006.

The company had pledged to donate P1,000 for every unit of Urvan light commercial vehicle sold.

This, however, is not the first time CCT and UMC worked together. The partnership started a few years ago when the automotive firm provided business loans to 50 CCT urban poor families.

Revolving fund

Repayments flowed back into CCT's revolving fund for further lending.

The partnership evolved into its current state as CCT was in the process of developing an entrepreneurship curriculum aimed at some 120,000 "community partners" or CCT members nationwide.

The training program — composed of 20 modules focused on developing entrepreneurs and business management — was drawn up with the help of ABS-CBN Foundation. Those who complete the 20 modules shall receive a certificate from the University of Makati.

"UMC has been so generous with us that we decided to share these modules for those availing of the UVUB packages," Veñegas says.

UMC senior vice president Elizabeth H. Lee finds the results of the partnership remarkable.

"Those who have started as (beneficiaries) are now themselves benefactors — employers in fact," Lee says.

She cites Tatay Daniel, who employs four people in his wholesale business.

There is also the story of a mother who has a knack for cooking — she has opened her own misua (noodle) factory and now needs an Urvan to deliver her goods.

"And then there is the thirtysomething man who is a wholesale trader in Baseco compound (an urban poor community in Tondo, Manila)," Lee says. "The list goes on and there are many true life-changing stories."

Common vision

CCT president Ruth S. Callanta says the team up with UMC clicked because they "share a common vision of a poverty-free Philippines."

"The UVUB program is different from other business advocacies in that it is integral to a company’s business," Callanta notes. "It is a clear expression of UMC's corporate social responsibility."

For Lee, the UVUB has given the firm an "expected success to an unexpected degree."

"The beauty of the program is that it taps into the innate desire of people to supplement their own income or element their financial situation to a comfortable level," she says.

UVUB presents the Urvan which comes in variants that can seat 12, 15 or 18 people as capital for a self-liquidating enterprise such as a shuttle service or any type of roving venture — be it as a carpool, cargo van, rental van or ambulance.

Lee says the interest that UVUB generated has translated into inquiries from overseas Filipino workers.

The campaign boosted Urvan sales to 60 to 70 units a month.

"Now we have to aggressively improve on the UVUB to serve the needs of our expanded customer base, including i companies that are willing to support their employees to get into the program," Lee says.

Starting your own "Ur Van Ur Business"

Email customercare@mynissan.com.ph OR text your name address and contact number to 0917-83-URVAN or visit your nearest Nissan dealer now and ask about “Ur Van, Ur Business.” Well-trained Nissan Sales Professionals (NSPs) of participating dealers will be available to answer your queries and handle your concerns about this program.

Discuss this in the Ur Van Ur Business thread in the PMT Forum. 

- From "Ways for Juan de la Cruz to make money" by Ronnel Domingo, published on http://business.inq7.net