The Board of Trustees of the BCBP, in consultation with the Board of Trustees of the BCBP Eco-Reach Foundation, Inc., after thorough review of the fund and its operations, officially announced the termination of the Eco-reach Alay Kay Nanay Micro Lending Program as a national social advocacy project of the BCBP effective December 31, 2009.
The BCBP leaders emphasized, however, that this does not mean the BCBP is withdrawing its community pro-poor programs. The leadership is even now defining such other programs to address the needs of the under-privileged in our midst.
The detailed explanation of this move is fully contained in the January 14, 2010, memorandum addressed to the BCBP Community, signed by Bobby Atendido, Chairman, BCBP Board of Trustees, and Larry Veloso, BCBP President. The complete memo follows.
Date : January 14, 2010
To : The BCBP Community
Thru : AMD’s Bros. Lito Pardo (Northern Luzon), Manny Jimenez (Southern Luzon), Mayong Rodriguez (Visayas), Jong Tiro (Mindanao)
From : Bro. Bobby Atendido, Chairman, BCBP Board of Trustees
Bro. Larry Veloso, BCBP President
Re : Eco-reach Program
On behalf of the Board of Trustees of the BCBP, we wish to formally inform all BCBP members that the Board has, in consultation with the Board of Trustees of BCBP Eco-Reach Foundation, Inc. (“BEFI”), officially terminated the Eco-reach Alay Kay Nanay Micro Lending Program as a national social advocacy project of BCBP effective 31 December 2009.
This most difficult decision to stop the Nanay program was arrived at after a thorough review of the fund and its operations. Care was taken to unwind the operations whilst trying to preserve whatever cash was left available to be properly accounted for by the Chapters and Outreaches who were still as of late 2009 still operating Eco-Reach Centers.
Unfortunately, not all members have been made aware of this decision and for this reason we have decided to write all BCBP members to formally explain why your Board of Trustees has taken this action.
The BCBP Eco-Reach Nanay Program was started more than seven years ago, when the national leadership under BCBP President Bro. Louie Morales decided to launch the program as the community’s social response to poverty alleviation. It was felt that the community had to go beyond its borders and address the needs of the poor and the disadvantaged in our society.
At the time, there were a lot of existing business models of successful micro finance operations all over the country and it was our assessment that we could replicate the same success in poor communities nearest to our chapters and outreaches. Beyond just the business aspects of the project, we thought that we could also integrate value formation as a key transformational ingredient of the Nanay program which the BCBP community could handle.
The BCBP Eco-Reach Foundation, Inc. was established on August 2, 2002 with its own Board of Trustees and management to manage and oversee the Program. At the outset, the BCBP leadership made it clear that the Program must be operated independently as a commercial venture and not as a charitable operation. For this reason, it must have its own organizational, capital and other resources to sustain itself as a going-concern operation with the goal of benefiting the poorest of the poor.
To help start the project, Metro Manila was selected by BEFI as the initial target area where the business model and the corresponding policies and processes could be tested and refined as necessary not only to gain experience but also prior to a nation-wide launch.
With the generous contribution of a handful of BCBP members combined with some fund raising activities, BEFI had enough starting capital to commence operation in selected areas in Metro Manila.
Within a two-year period, the Metro Manila Eco-reach operation was considered a success with good repayment history and very low delinquency rates. Thus, the management and Board of Trustees of BEFI with the concurrence of BCBP leadership agreed to launch the Program nation-wide, in selected chapters outside of Metro Manila.
As integral elements of the Program’s nation-wide launch, it was recognized that the following key components had to be in place in order to place the Program on a self-sustaining basis:
• Raising of at least P 10 million in capital for BEFI which was considered to be the critical level of capital required to grow the business;
• Beef-up of head office management and staff to manage the more complicated administration of a nation-wide operation;
• Hiring of a full time Managing Director to lead the organization who would be no longer on a “pro bono” basis but compensated with a fair and market-based salary;
• Manualization of all operating procedures and training protocols for the Development Officers to be recruited who will handle the lending operation;
• Coordination with the Chapters and Outreaches that will launch the Program in their respective areas.
Both BCBP and BEFI were confident that the capital build-up to the required P 10 million level could be raised on the basis of three key initiatives:
i) A one-time donation of P 500 from every BCBP member to BEFI would be solicited;
ii) “Bote Para Kay Nanay” Program, a savings plan that BCBP members and their families could do to support the Program on a continuing basis; and,
iii) Initial seed fund of P 50,000 per chapter that wanted to undertake the Program in its area.
With the full support of the entire BCBP community of these initiatives, it was expected that the required capital of P 10 million could be raised over a period of time. After all, the BCBP community had around 30,000 members nation-wide and it was felt that if each member committed to contribute the amount of P 500 to the Program, BEFI will have more than P 10 million in total contributions. To make it even easier, the payment of the P 500 donation was even structured either in cash or installment basis.
On this basis, the Eco-Reach Alay Kay Nanay Program was launched nation-wide in mid- 2006. There were of course initial operating problems in some areas but the BEFI management was able to address and resolve most operational issues.
What it could not address, however, was the delay in raising the required capital. More than two years after the nation-wide launch, it became clear that the capital shortfall could not be overcome and the financial resources required to operate the fund were waning .
The target level of donations to generate the amount of P 10 million for the fund was never achieved. Far from it, actual contributions came in trickles and were never enough to sustain the operation.
This resulted in critical loan volume targets not being met. Overhead expenses ate up most of the interest income generated. Loan applications and re-availments from many Nanays could not be serviced. Delinquencies from existing loans increased to alarming levels. Backroom operations suffered.
As a result, the Program ran in the red depleting over time whatever residual financial resources BEFI had. It became obvious to both BCBP and BEFI leadership that without funding support from the members of the community, the operation could not be sustained. Thus, after due deliberation, the decision to discontinue the Program was made in mid-2008, and thereafter, the program was slowly but carefully unwound.
Chapters and Outreaches that had viable lending programs at that time who wished to continue their micro finance lending program were advised by the Board to either create their own foundation to house the program or to tie-up with existing micro-finance organizations in their respective areas. The BEFI, meanwhile, let go of its administrative staff and Developmental Officers due to lack of funds.
In short, the Eco-Reach fund had dried up and the Program had effectively ground to a halt.
The question we suppose in the minds of those who generously contributed to and supported the Program is: Where did the money that was raised for the Eco-Reach Program go?
The simple answer is that the funds went to the Nanays who borrowed and eventually defaulted on their obligations when the Program began to falter, as well as towards maintaining administrative overhead during the period the program was operational.
The venture to undertake the Eco-reach Program was an expensive exercise, a hard lesson for both BCBP and BEFI. Still, we take heart and consolation in the good the Program was able to extend to the poor Nanays who availed of it for that period of time that the Program was running.
At this time, allow us to acknowledge the following BCBP community members who generously contributed their valuable time and management skills on a pro-bono basis, to the Program:
Bro. Rey Feria of Las Pinas Chapter, Bro. Joji de Rivera of Alabang Chapter, Bro. Jun Densing and Bro. Sadi Saguisag of Paranaque Chapter. We also thank the Program’s generous volunteers, donors and contributors whose names will remain anonymous but are etched in the heart of Jesus.
This sad experience does not mean we are withdrawing our community’s pro-poor programs. On the contrary, we are emboldened to move on and define an appropriate program that will address the needs of the under-privileged in our midst with more fervor and determination.
May our Lord continue to guide our actions and continue to inspire our brothers and sisters to become agents of change in our country .
God bless the BCBP.
Chairman, BCBP Board of Trustees