Chapter I

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

aimed to support the government to strengthen rural financial institutions by assisting

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

control resources and break the deprivation and gaps themselves.

 A strong provision of financial services should stimulate the development of control over

constraints that will shape their responses and behavior. It can deliver social benefits on an on-

going, permanent basis and on a large scale.

Background of the Study

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-

unlad Inc. (TSPI).

TSPI is viewed as a financial institution that lived up to its social responsibility of

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

included such as their income, household composition and nature of membership.

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

socio-economic development of its members.

Objectives of the Study

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:

1. To determine the business profile of TSPI Development Corporation, Sariaya branch.

1.1 Historical background

1.2 Mission, Vision and Goals

1.3 Organizational Structure

1.4 Technical Structure

2. To identify the microfinance operations provided by the business.

2.1 Programs and Services Offered

2.2 Access to Credit

2.3 Lending Methodology and Process

3. To ascertain the member-respondents profile in terms of :

3.1 Household Composition

3.2 Income-Generating Activities

3.3 Nature of Membership

4. To evaluate the degree of socio-economic contribution of the business to its members

through :

4.1 Meeting their financial needs

4.2 Providing returns on the members investment

4.3 Building social relationship

4.4 Contributing impact to the society

 5. To know the problems encountered by the members of TSPI relative to its program and

services.

Significance of the Study

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

members’ affiliation and upgrading management techniques in the implementation of the

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

reference material for the same kind of study.

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

members. It may enlighten their awareness in accordance to the contribution of microfinance

programs that is duly conducted by lending institutions. It may give additional knowledge that

they can apply in the future.

Scope and Limitation

The study was limited only in identifying the socio-economic contribution of the TSPI

Development Corporation in Sariaya, Quezon to its members. It focused on determining the

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

researchers through the use of Slovin calculator.

Further, the researchers used structured questionnaire which is supplemented by

observation, interview, research from the internet and related studies. The research was

conducted from January to November 2018.

Definition of Terms
This is to define the following terms that are used in the study for the understanding of

the readers.

Active Members are clients who avail and pay the loan in a timely basis and

patronizes the services of the institution.

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.

Economic empowerment is the consequence of increase in income, savings and self-

employment thus reducing unemployment and indebtedness of the members.

Empowerment refers to increasing the spiritual, political, social and economic strength of the

members and the Sariaya community.

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

supervision are directed toward the achievement of TSPI organization.

Social empowerment is related to the participation of people in Sariaya community and political

institutions, mobility and decision-making power.

Socio-Economic studies how economic activity affects and is shaped by social processes. It

analyzes how members progress, stagnate, or regress because of TSPI.

Socio-Economic Status is an economic and sociological combined total measure of the

member’s works experience and social position in relation to others, based on income, education,

and occupation.

TSPI is a gospel-driven, microfinance NGO, whose mission is to provide individuals and

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

REVIEW OF THE LITERATURE AND STUDIES

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.

The Nature and Context of Microfinance

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

additional 5 million household members could be added to the movement.

Also, in October 2006, De Venecia recommended to President Arroyo the building of a

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

Association of Southeast Asian Nations (ASEAN) proposed an Asian Microfinance Fund in

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

held in Tehran, Iran in November 2006.

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

other members of society can work together to achieve.

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

(non-government organizations) and informal sources (money lenders and shopkeepers). It is

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

responses and behaviour.

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;

and that microfinance institutions can be operationally and financially be self-sufficient. A

microfinance institution (MFI) is an organization that provides financial services to low income

populations such as a cooperative, an NGO and a commercial bank.

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,

insurance, etc.)”. Therefore microcredit is a component of microfinance in that it involves

providing credit to the poor, but microfinance also involves additional non-credit financial

services such as savings, insurance, pensions and payment services.

Key Principles of Microfinance

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

key principles of microfinance.

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,

cash transfers, and insurance.

2. Microfinance is a powerful instrument against poverty. Access to sustainable financial

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

health and education.

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

countries, microfinance continues to be seen as a marginal sector and primarily a development

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

the financial sector.

4. Financial sustainability is necessary to reach significant numbers of poor people. Most

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.

5. Microfinance is about building permanent local financial institutions. Building

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.

Dependence on funding from donors and governments—including government-financed

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

should be coupled with building savings.

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

they need to be.

8. The government’s role is as an enabler, not as a direct provider of financial services.

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

institutional capacity of financial providers, develop supporting infrastructure (like rating

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

otherwise difficult-to-reach populations. To be effective, donor funding must seek to integrate

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,

both public and private, should focus on this capacity building.

11. The importance of financial and outreach transparency. Accurate, standardized, and

comparable information on the financial and social performance of financial institutions

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

adequately assess risk and returns.

The Impact of Microfinance on Poverty

There is a certain amount of debate about whether impact assessment of microfinance

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)

develop a global partnership for development.

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

income security can be improved.

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

decreases in vulnerability of microfinance clients”. They refer to projects in India, Indonesia,

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

expectation” he does concede that some positive impacts do take place.

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

also of the poorest in society.

Social Impact Analysis

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

microfinance interventions are to be understood.

Zohir and Matin (2004, p.301) make a similar point when they state that the impact of

microfinance interventions is being under-estimated by “conventional impact studies which do

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

participation in social and political processes.

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

the findings from wider assessments of microfinance interventions at a household and

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

education than comparable non-client households”.

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

in their children’s education.

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

thereby increase their income.

 Following a three-year study of 906 clients, ASA17 an MFI working with 60,000 rural

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

such as livestock, equipment and land (ibid.).

In 2002, FINRURAL, a microfinance networking organisation in Bolivia, carried out

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”

perspective in a programme in Bangladesh where they examined seven dimensions of ‘human-

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.

Impact in Human Development

Microfinance has a very important role to play in development according to proponents

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

associated with improvements in household economic welfare, helps to empower women by

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

participate in the economy and society.

 The aim of microfinance according to Otero (1999) is not just about providing capital 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

number of poor people they can reach.

More recently, commentators such as Littlefield, Murduch and Hashemi (2003),

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

impact on the achievements of the MDGs…microfinance is unique among development

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

schemes are less effective than they might be”.

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

resources to fight poverty, microcredit is irrelevant to the poorest people, an over-simplistic

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

services desperately needed by the poor”.

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

from more health care or food aid for example.

 Therefore, there is a need for all involved in microfinance and development to ascertain

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

the ‘poor’ “are fiercely contested issues” (1998, p.3).

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

day (World Bank, 2003).

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

like marriages, funerals and religious festivals.

Carney defines a livelihood as comprising “…the capabilities, assets (including both

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

offset risk, ease shocks and meet contingencies.”

 Lindenberg defines livelihood security as “a family’s or community’s ability to maintain

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

shocks as well as to build up and diversify their livelihood activities”.

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

affecting people’s livelihood security (ibid.).

Therefore, when analysing the impact microfinance is having on livelihood security, as is

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

the livelihoods of the poor.

 Development is deeply related to rising income. However, it is true that other variables

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.

Tackling poverty points to multidimensional concepts that emphasizes on reducing

unemployment, infant mortality, maintaining essential healthcare, sanitation, food, nutrition

basic hygiene, establishing gender equality etc.68 On the other hand, how these kinds of

development can be achieved? It is possible to achieve those development indexes, if disposable

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

community and micro-enterprise economic development, agriculture and food policies,

education policies, macroeconomic policies, and environment or infrastructure investments to

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

corrective actions to modify methods of implementation of program, health message, training

and management, where needed.

 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

In the developing countries, achieving household food security remains a critical

objective of rural development. This can be done in principle by escalating agricultural

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,

Asad K. (2007), “Measuring the Impact of Microfinance Intervention: A Conceptual Framework

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)

Independent Variable Dependent Variable

Profile of Tulay sa
Pag-Unlad Incorporated
(TSPI)

Socio-Economic Impact
Profile of the Respondents

TSPI Programs and Services

Problems Encountered in TSPI

Figure 1. Research Paradigm

Conceptual Framework

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

members of TSPI through the questionnaire that were given to them.

 Chapter III

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.

Locale of the study

The study was conducted in selected barangays of the municipality of Sariaya, province

of Quezon where the livelihood credit assistance program of Tulay sa Pag-unlad Incorporated

Development Corporation (TSPI) is located.

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

study which answered the socio-economic impact of TSPI to its members.

Population and Sampling

Data was gathered from 96 members coming from the estimated total population of 2,400

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

represent the total population of all the members.

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

administration and member-respondents.

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

the customers’ degree of certainty and uncertainty as stated below:

Table 1. 3-Point Rating Scale

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

questionnaires was analyzed.

Data gathering procedure

The researchers presented an approval letter to the manager of TSPI Development

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

same day of distribution for tabulation purposes.

Statistical Treatment

Simple Percentage. Frequency and percentage distribution of the demographic profile of

the respondents was analyzed using the formula below:

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

TSPI Sariaya to its members:

4𝐹 + 3𝐹 + 2𝐹 + 𝐹
𝑊𝑀 =
𝑁

Where: WM = weighted average

F = frequency of each option
N = total number of respondents
 Chapter IV

RESULTS AND DISCUSSIONS

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.

1. Business profile of TSPI Development Corporation, Sariaya Branch

The profile of TSPI Development Corporation, Sariaya Branch was determined through their

historical background, mission/vision/goals, organizational and technical structure.

1.1 Historical Background

Tulay sa Pag-unlad Inc. is a gospel-driven, microfinance NGO, whose mission is to provide

individuals and communities the opportunities to experience fullness of life through small and

micro-enterprise development. It provides the poor with opportunities to lead self-sufficient,

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

disabled, particularly the blind.

Then in 1986, TSPI started replicating its services in the countryside through the

establishment of provincial partners, namely Kabalikat Para saMaunladnaBuhay, Inc. (KMBI) in

Valenzuela City, TaytaysaKauswagan, Inc. (TSKI) in Iloilo City, RangtaysaPagrang-ay, Inc.

(RSPI) in Baguio City, AlalaysaKaunlaransaGitnang Luzon, Inc. (ASKI) in Cabanatuan City,

HagdansaPag-uswag Foundation, Inc. (HSPFI) in Cagayan de Oro City, and Talete King

PanyulungKapampangan, Inc. (TPKI) in San Fernando, Pampanga. In 1989, the Sakbayan

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

Alliance of Philippine Partners in Enterprise Development (APPEND). A Transformation

Program anchored on a wholistic and Biblebased framework was launched. In 1992, the

Kabuhayan (Livelihood) Program was launched. TSPI received hands-on training, technical

assistance and support from Grameen Bank and Grameen Trust.

While in 1996, TSPI spearheaded the formation of a Coalition of microfinance practitioners

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

Award” from Opportunity International Network, a global network of microfinance practitioners

and support partners, based on repayment rate, client outreach, average loan size, operational

sustainability, governance and transformation. TSPI joined other microfinance institutions in

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

Social Advancement (ASA) Program was launched.

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

Partners in 25 countries. It established a Project Partnership Agreement with Opportunity

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

as an “Organization Advancing the Status of Women” by Soroptimist International Philippines

(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

from US-based Microfinance Information Exchange (MIX). MIX is composed of 443

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

and partners of TSPI.

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

where each town has its own sub-branches.

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

different Barangays and areas of it.

1.2 Mission, Vision, Goals

Mission

To see people, individuals, families and communities the opportunities to experience

fullness of life in Christ through Christian microenterprise development

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:

 Servant hood – each one working with a servant heart.

 Integrity – one doing what is right despite the cost even when no one is looking.
  Stewardship – each one taking responsibilities as faithful rewards.

 Excellence – each one working for the glory of God.

Through its works, TSPI hopes to pass on these values so clients can realize fullness of

life, which material growth alone cannot bring about.

1.3 Organizational Structure

The organizational structure of TSPI Development Corporation is so complex compare to

its Branch’ Organizational Structure showing only three levels of authority and responsibility.

Figure 2. Organizational Structure of TSPI, Sariaya Branch

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.

Duties and Responsibilities

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

Center Recognition test.

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

accuracy of computations and the necessary signatures for approval.

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

of the members to the Account Officer for distribution.

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

physical structure which includes vicinity map and office layout.

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 3. Vicinity Map of TSPI, Sariaya Branch

 Figure 4. Office Layout of TSPI, Sariaya Branch

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.

2. Microfinance Operations of TSPI, Sariaya Branch

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

TSPI Kabuhayan Program (TKP) – is a livelihood assistance program that provides

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.

Included in the TKP are the following loan programs:

 Multi-Purpose Loan – is a cash loan that aims to provide financial assistance to

qualified members for House Repair, Minor Home Improvement, Home

Enhancement, Tuition/ Educational Expenses, Health and Wellness, Livelihood

and Other purposes.

 Housing and Sanitation Loan – is a loan facility for housing, toilet and water

source construction/renovation and for electrical connection fee. Loan amount

ranges from 10,000 to maximum of P100,000 (with collateral above P70,000).

Loan terms range from six months to three years.

 Educational Loan Assistance Program – offers loans for any school-related

expenses of the clients’ children who are in pre-elementary to post-graduate level.

The maximum loan amount is P20,000 payable in three to six months, with

weekly repayment. Special training courses for clients and immediate family

members may also be covered by this program.

  Hog Fattening Loan – offers loan to grow-out production system that involves

buying young pigs and feeding them to market weight.

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

disability or death of member(s) of the family.

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

Table 2. TSPI Microinsurance

Services

 Values Formation

 Leadership Skills

 Community Development

2.2 Access to Credit

Qualified Borrowers:

 Both men and women, whether single or married.

 Not below 18 years of age and not above 60.

  Must be within the poverty line or having at least P2,500 per capita income.

 With or without existing business.

 A member or willing to be a member of TSPI through a Center (having a least 10

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).

Requirements for Membership

 Should attend the one (1) day Branch Orientation and Recognition.

 Birth Certificate

 Barangay Clearance

 Married Certificate (if married)

2.3 Lending Methodology and Process

2.3.1 Lending Methodology

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

Officer) in the 3 Cycle Loan.

C. Interest Rate

 Charges 3% monthly interest rate (fixed)

 No other charges, such as service fee

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)

 5% of Loan Release as Compensating Balance (will automatically be added in member’s

total savings)

E. Internal Control Policies

 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

of a Center (wherein the borrower is a member) is insufficient as to the required

collection for the week. The required collection is based on the Center’s responsibility as

to the member’s current loan.

 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

are solidarily liable for the entire weekly due.

 Monitoring – The Account Officer who is designated to a certain Center is responsible in

monitoring the members of each Center. They monitor each member through the conduct

of weekly Center meetings; each AO is monitoring several numbers of Centers having a

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

new programs or services to be offered. The AO is responsible for making an inventory

 count of the Branch’s loan releases for each Center and reports the results to the Senior

AO for the evaluation of Center Performance.

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.

2.3.2 Lending Process

1. Orientation for individuals who wants to be a member.

2. Making of Loan Proposals.

3. Approval of Loan Proposals by the Members of the Center during Center Meeting.

4. Submission of the Approved Loan Proposal to the AO of the Center.

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

who are applying for a loan.)

6. Submission of the evaluated Loan Proposal to the BM for notification and final approval.

7. Preparation for Check issuance by the BA.

8. Loan Release at the Branch office with the provision of a promissory note.

9. Encashment of Checks in the bank.

 3. Profile of the Member-Respondents

The profile of the member-respondents was determined based on their demographic and

membership profile.

3.1 Household Composition

Table 3. Profile of the Respondents in terms of Sex

Sex Frequency Percentage

Male 7 7.29%
Female 89 92.71%
Total 96 100%

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

perform better in repaying loans than male borrowers.

Table 4. Profile of the Respondents in terms of Age

Age Frequency Percentage

24 – 29 6 6.25%
30 – 34 23 23.96%
36 – 41 19 19.79%
42 years old and above 48 50 %
Total 96 100%

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

23.96%, 19.79% and 6.25% respectively.

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

age of the respondents ranges between 30 to 50 years old.

Table 5. Profile of the Respondents in terms of Civil Status

Status Frequency Percentage

Single 4 4.17%
Married 77 80.21%
Widow/er 10 10.42%
Separated 5 5.20%
Total 96 100%

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

consumers as to civil status having transactions with microfinance institutions. This is an

indication that married people are the ones actively involved in the negotiation with

microfinances.

Table 6. Profile of the Respondents in terms of Number of Dependents

No. of Dependent/s Frequency Percentage

1-3 57 59.38%
4-6 34 35.42%
More than 6 5 5.21%
Total 96 100%
 As shown in the table above, most of the respondents have 1-3 children with 57 or

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. Profile of the Respondents in terms of Educational Attainment

Educational Attainment Frequency Percentage

Elementary 16 16.67%
High School 54 56.25%
Vocational 4 4.17%
College 22 22.92%
Total 96 100%

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

are of vocational course with 4 or 4.17%.

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

obligations in the organization.

 3.2 Income-Generating Activities

Table 8. Profile of the Respondents in terms of Estimated Monthly Income

Income per month Frequency Percentage

Lower than 3000 14 14.58%
3000-6000 29 30.21%
6000-9000 16 16.67%
More than 9000 37 38.54%
Total 96 100%

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.

Table 9. Profile of the Respondents in terms of Livelihood Programs

Livelihood Programs Frequency Percentage

Services 20 43.75%
Trading 42 20.83%
Production 14 14.58%
Others 20 20.83%
Total 96 100%
 Table 9 reveals that majority of the respondents were engaged in livelihood program

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.

3.3 Nature of Membership

Table 10. Profile of the Respondents in terms of Duration of Membership

Nature of Membership Frequency Percentage

1-2 20 20.83%
3-4 15 15.63%
5 and above 61 63.54%
Total 96 100%

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.

4. Degree of Socio-Economic Contribution of TSPI to its Members

To evaluate the socio-economic contribution of TSPI to its members, sets of questions were

presented to the respondents based on four following factors:

 4.1 Meeting their financial needs

Table 11. Level of Socio-Economic Contribution as to Basic Financial Needs

Weighted Qualitative
Basic Needs
Mean Description

Statement1 3.48 Strongly Agree

Statement2 3.05 Agree

Statement3 3.01 Agree

Statement4 3.11 Agree

Statement5 3.05 Agree

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.

4.2 Providing returns on the members investment

Table 12. Level of Socio-Economic Contribution as to Return on Investment

Weighted Qualitative
Business Capital
Mean Description

Statement1 3.47 Strongly Agree

Statement2 3.26 Strongly Agree

 Statement3 3.35 Strongly Agree

Statement4 3.39 Strongly Agree

Statement5 3.38 Strongly Agree

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

members of the institution in terms of business capital.

4.3 Building social relationship

Table 13. Level of Socio-Economic Contribution as to Social Relationship

Weighted Qualitative
Social Relationship
Mean Description

Statement1 3.21 Agree

Statement2 3.23 Agree

Statement3 3.04 Agree

Statement4 1.52 Strongly Disagree

Statement5 3.39 Strongly Agree

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

institution in terms of social relationship.

4.4 Contributing impact to the society

Table 14. Level of Socio-Economic Contribution as to Impact to the Society

Weighted Qualitative
Impact to the Society
Mean Description

Statement1 3.63 Strongly Agree

Statement2 3.19 Agree

Statement3 3.34 Strongly Agree

Statement4 3.31 Strongly Agree

Statement5 3.25 Strongly Agree

Statement6 3.27 Strongly Agree

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.

5. Problems encountered by the Members

To determine the possible problems encountered by the members in the institution.

Table 15. Problems Encountered by the Members

Problems Encountered Frequency Percent

I have difficulty in repaying my microloan. 12 12.50%

The employees are not approachable. 2 2.08%

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

the program and services offered.

 CHAPTER V

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

Based on the data gathered, the researchers come up with the following findings and

conclusions.

Summary

This research study is intended to evaluate the socio-economic contributions of Tulay sa

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

historical background, mission/vision/goals, organizational structure and technical structure

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

methodology and process. Third, is to ascertain the member-respondents profile in terms of

household composition, income-generating activities and nature of membership. Forth is to

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.

1. Business profile of Tulay sa Pag-unlad Inc., Sariaya Branch

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

an active member of several MFI networks.

2. Microfinance Operations of Tulay sa Pag-unlad Inc., Sariaya Branch

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.

Generally, the payment of loans acquired by members is on a weekly basis.

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.

4. Socio-economic Contribution of the Business to its Members

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

from other barangays/areas.

 5. Problems Encountered by the 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

as complicated as other lending institutions is experiencing.

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

currently on the top and said to be sustainable.

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

releases to decline and sometimes current loans are left unsettled.