Vince Rapisura 2307: Improving financial literacy of KaNegosyo members through capacity building
Video Transcript / Subtitles:
About AI Subtitles »
* AI ("Artificial Intelligence") subtitles on Tagalog.com are generated using "Whisper" by OpenAI (the same company that created ChatGPT and DallE2). Results and accuracy may vary.
* The subtitles do include errors occasionally and should only be used as a tool to help with your listening practice.
* You can request this website to create a transcript for a video if one doesn't already exist by clicking the "Request AI Subtitles" button below a video. Transcribing usually takes 30-40% of the length of a video to complete if there are no other videos in the queue
. For example, a 21 minute video will take 7-8 minutes to transcribe.
* Running a super fast cloud GPU server to do these transcriptions does cost money. If you have the desire and financial ability, consider becoming a patron
to support these video transcriptions, and the other tools and apps built by Tagalog.com
Improving financial literacy of SEDPI kanegosyo members through capacity building.
Education can be a powerful tool for breaking the cycle of poverty and economic mobility,
as it can increase individuals' earning potential and provide them with the skills and knowledge
needed to secure better-paying jobs. It can also play a role in promoting social change
by fostering critical thinking, promoting cultural understanding,
and teaching individuals about their rights and responsibilities as citizens.
Education also plays a vital role in addressing issues of inequality and discrimination by
providing marginalized and disadvantaged groups with the tools and resources they need
to succeed and participate fully in society. A financial literacy training can provide
individuals with the knowledge and skills they need to manage their finances effectively
and make informed decisions about saving, investing, and spending.
This can help to increase their earning potential and promote economic activity.
By teaching individuals about money management, a financial literacy training can help individuals
make better financial decisions and avoid financial pitfalls that can trap them in a
cycle of poverty. It can also empower individuals to take control of their finances and make
informed decisions about their financial future, which can promote social change by
helping to level the playing field for marginalized and disadvantaged groups who may have
historically been excluded from financial services and opportunities.
CEDPI, a group of social enterprises in the Philippines, uses financial literacy as a
strategy to enact social change. It envisions the empowerment of Filipinos worldwide in
a manner that they live dignified lives and productive members of society.
As a social enterprise, CEDPI provides innovative financial services and effective
financial education to nano-enterprises and social investors.
One of the goals of CEDPI is to contribute to local economic development of nano-enterprises,
recognizing nano-enterprises as a pillar of inclusive growth.
Education as a strategy is embedded in CEDPI's second goal in providing continuous
education for community empowerment. The third goal is to provide social welfare
protection to nano-enterprises in times of calamities and emergencies through the use
of indigenous coping mechanisms. Lastly, it aims to develop a movement of social
investors that puts social and environmental agenda over profits.
To ensure that these goals are achieved, the following are CEDPI's inputs and activities.
It will conduct financial literacy trainings to its members to ensure that members have
the capacity to manage their money. Providing ethical financing products and
services will further give CEDPI members the chance to create and accumulate wealth
with due regard to social and environmental costs.
Performance of members are closely monitored and evaluated to ensure that their accumulating
savings have adequate insurance protection coverage and are less dependent on debt.
With the activities, the following are the expected outputs.
Through financial education, CEDPI members have effective money management behaviors.
They are able to increase their savings and have positive accumulation of business and
personal assets. Members also have easy access to social
safety nets against emergencies and disasters, not just from CEDPI, but more importantly
from the government. The expected outcomes are as follows.
CEDPI members have manageable debt levels and are able to use savings and insurance
as more effective financial products versus dependency on debt.
Their livelihoods are sustainable and member nano-enterprises also have diversified income
sources. CEDPI members also have a robust financial
preparedness against disasters through savings and insurance consistent with disaster
risk reduction strategies. Finally, the impact would be an overall
improvement of the quality of life of CEDPI members as they are able to break the cycle
of poverty and move up the socioeconomic ladder.
The overall threat of disasters is mitigated through disaster risk reduction.
Since 2017, CEDPI provided capacity building to its members on financial literacy in the
form of trainings, orientations, small group meetings, and the development of information
and campaign materials. The following are examples of topics covered.
Importance of savings and insurance through Damayan.
Good versus bad uses of loans. Buying non-productive assets through savings,
not loans. Plan for increasing business capital through
savings and reducing loan. This is an example of a visual aid used to
differentiate CEDPI's financial empowerment strategy versus other microfinance institutions.
Instead of loans, CEDPI enters into a joint venture with its members.
The goal of a traditional microfinance institution is to collect repayments,
which puts the organization's financial sustainability over the members.
Under CEDPI, the main goal is to assist its members grow their livelihoods.
Thus, CEDPI treats its members as equals as it enters into a business partnership
arrangement versus a traditional creditor-debtor relationship,
where the creditor usually takes the upper hand. In most microfinance institutions,
their goal is to increase the loan amount of clients, making them more dependent on debt.
In CEDPI, we teach our members to save so that they reduce their dependency on loans.
We emphasize, and the members agree, that a sustainable livelihood is one that has
capitalization coming from income saved rather than through loans.
In traditional microfinance institutions, interest is continuously charged to the client,
even if the reason for non-repayment is due to calamities, sickness, and other external
emergencies. In some instances, penalties are even charged in addition to the interest.
CEDPI, in stark contrast, only collects service charge which is fixed. No interest or penalty is
charged, even on late payments. The principle is not to enrich ourselves due to the misery of
others. Instead of charging punitive interest and penalties, CEDPI will assist its members
find ways in order to repay and recover. As business partners, CEDPI and its members
help each other so that no one gets left behind. Microfinance institutions provide
insurance to their clients that usually takes months to process claims. CEDPI,
through the use of indigenous insurance practice called damayan or dayong,
pays out claims within one week. This is for members to avoid getting into debt in times of
emergencies. Most microfinance institutions provide lime insurance coverage only. CEDPI's
damayan provides more comprehensive coverage that includes life, sickness, calamity, fire,
funeral, and accident benefits. CEDPI endeavors to revive indigenous money management practices
that has proven to be effective since these are embedded in our cultural heritage. The main goal
of savings mobilization in microfinance institutions is to function as collateral
to loans of members as well as main source of fund to finance their loan portfolio.
For CEDPI, savings of members function as a collateral to the joint venture but more
importantly this can be used for emergency purposes. Traditional microfinance institutions
also typically offer loans to their clients to purchase non-productive assets. This will make
these purchases almost twice as expensive due to the interest. In CEDPI, delayed gratification
is emphasized. Members are encouraged to save for what they intend to purchase through a layaway
program. This way members pay the items at the suggested retail price while CEDPI earns through
the discount it gets due to bulk buying. We emphasize in all our financial education efforts
that life is more convenient when savings is increased and loans are reduced. The following
are the results of CEDPI's capacity building program which began in 2017. As of December 2022,
CEDPI has expanded its branch network from 2 to 14 covering the provinces of Agusan del Sur,
Davao de Oro, Davao del Norte, Surigao del Sur, and Zamboanga City. It has outreach of 15,000
members. The standard client growth rate of the microfinance industry is 5% per year. CEDPI's
compounded growth rate is 25% which is 5 times higher than the industry standard. This indicator
shows how CEDPI is able to achieve its mission to reach low-income nano enterprises. CEDPI's
joint venture portfolio with nano enterprises grew from 43.3 million in 2020 to 76 million in
2022. The standard portfolio growth rate of the microfinance industry should be at par with the
GDP growth. In the past six years, the average GDP growth is at 4.2%. CEDPI's compounded portfolio
growth rate is 21% which is four times faster than GDP growth for the same period. The portfolio
at risk rate measures the probability of non-collection. The standard portfolio at risk
ratio in the microfinance industry is less than 5%. CEDPI's portfolio at risk ratio is below 1%
for 2021 and 2022 which reflects stellar portfolio quality performance. Overall,
accumulated savings of members rose from 7.37 million in 2017 to 29.45 million in 2022.
Insurance claims extended to members also rose from 1.59 million in 2017 to 5.87 million in 2022
with an average turnaround time of 1.25 days. The growth in membership and improving portfolio
quality signals member loyalty and increasing marketability of CEDPI ethical financial products
and services. The growth in savings also signals less dependency on loans to finance livelihoods
and household needs among nano enterprises. The increase in insurance claims is a sign
that CEDPI places protection of nano enterprises against emergencies and disasters. Overall,
financial literacy reinforced ethical financing to make nano enterprises become less dependent
on debt, grow their livelihoods and be disaster resilient. In conclusion, CEDPI's model of
capacity building on personal finance together with ethical finance as a tool for socioeconomic
development of nano enterprises is effective. Monitoring and evaluation is key to ensure
that nano enterprises implement what they learn.