VI. Conclusions and recommendations
In general, the credit program as a component of PHI/89/P16 appears to be an effective strategy for providing seed capital for micro-scale livelihood enterprises. The short term financing has allowed the participants to put up and operated their choice IGPs within their level of capabilities.
The program has certainly proven the important role of women in national development and socio-economic upliftment of the family. Individually, they have established more self-confidence in dealing with government and bank personnel. They are now perceived by their husbands as copartners in running their households as enterprises themselves.
Except for a few, most participants in Pangasinan, however, have not taken the opportunities to expand, diversify and fully utilize the earning capacities of their IGPs towards more sustainable operations. They depended more on succeeding tranches of credit rather than expanding their capital base and utilizing it for higher earning capacities, thereby boosting their loan repayment capability.
The following are the key lessons that can be derived from the project planning/appraisal process and technical assistance relative thereto:
a) While the current approach ensures that the project staff, group members and IGP Consultant together go through the whole procedure, it is designed to work effectively well for group projects, rather than individual borrowers. While undertaking project identification/developmemnt workshops, the IGP Consultant, therefore, has to adopt, right there and then, innovative but practical approaches to come up with the required outputs;
b) The project proposal is simply looked upon as a requirement to obtain credit, not as a busines plan to guide the participant in the operation of her project, nor as a management tool leading to sound business decision-making. This aspect should be properly communicated to the participants and made
a) Extension of the project/program should focus on attaining sustainability of existing IGPs financed under the lending arrangements, while strengthening project management operation in the covered localities.
b) Expansion especially of the credit component, should proceed moderately and be selective in terms of area; phasing of expansion may be according to the following scheme:
i) Acceptance of new beneficiaries for the same women's associations subject to beneficiary selection criteria (this may include membership of fishermen into the existing groups);
ii) Organization of fishermen into separate associations;
iii) Coverage of other coastal barangays should follow site selection criteria with consideration to the presence of similar development projects and viable/dependable financing channels; and
iv) Coverage of upland barangays of Eastern Pangasinan as the final phase.
c) With the involvement of all layers of program implementation including beneficiaries/ participants, a short-term expansion plan which defines the direction and goal of the project/program within the timeframe should be developed. An institutional development component directed towards cooperativizing the existing and new associations should likewise be specified in the plan. Adjustments in the plan may be done every year-end. As a tool, the plan will also be a basis for annual evaluation of accomplishments.
d) At the level of the National Project Coordinator, "Appraisal Teams" may be constituted to verify, validate and appraise proposals for IGP expansion, new site for selection including resource inventory and assessment, new asset-based IGPs, development of prototype projects in the upland areas. part of the prescribed topics for the enterprise management seminar;
c) On the onset of the IGP Consultant's assignment, a thorough briefing on project planning and appraisal process and particular requirements of the reviewing/approving authorities in the LOP Branches is deemed necessary so that project proposals can be prepared accordingly. IGP Consultant had to spend much more time than what was originally planned on re-appraisal and rewriting of several proposals. As a solution, the Consultant took the initiative of discussing the bank's requirements and expectations from the project proposals; and
d) In view of the foregoing, there is a need to reassess and make necessary changes/improvements to streamline the project planning/appraisal design in the light of the experience gained.
The existing IGPs of various women's associations in Pangasinan have yet to achieve sustainable operation whether or not PHI/89/P16 is extended/expanded or terminated. To expect such level of operation in the future is highly dependent on the actions of the Provincial Government, as recipient of the entire project after UNFPA/FAO withdraw in December 1994, with respect to providing a viable mechanism for the guarantee loan programme with the continued participation of the LBP.
Based on the outcome of the 22 September 1994 meeting of the PPCC, a more positive approach is for the Provincial Government through the Project Management Office to formally es press to UNFPA/FAO the need to continue the project with their support. The LBP should also formalize its intent to continue serving as fund conduit.
Soon after the decision is firmed up during the 10 October 1994 Tripartite Review in Capiz, the two parties can re-negotiate for a new memorandum of agreement to take effect in January 1995.
Endorsement of the project is merited. Hereunder are some guidelines along this direction:
The original project guidelines on the selection of participants based on the acceptable level of household income should be re-defined to ensure that poorer women in the fishing communities are included. A policy may be adopted on the proportion of poorer to relatively better-off households. Acceptable income level may be adjusted yearly to reflect inflation.
a) Processing of incoming loan applications from July 1994 to date has been slower than expected reportedly due to other commitments of the bank and the change in the managership of the LBP Dagupan Branch. This instance would usually require higher level intervention from the PMO and Office of the National Project Coordinator, if necessary;
b) Timely adjustment of loan ceilings per type/batch of project is required to reflect increase in costs of goods, supplies and materials inputs with due consideration to geographic locations of various projects. In practice, the IGP Consultant is still guided by the original loan ceilings. The process for adjustment of loan ceilings should be clarified, but it is clear that the Project Manager upon recommendation of the IGP Specialist/IGP Consultant should be given leeway to revise the loan ceilings up to a certain percentage to be agreed upon later without the need for approval of the LBP.
c) Considering the process of community organizing, training, project development, financing and implementation and the period during which developement change is catalyzed, the project implementor, at the national level, should now declare as a matter of policy the maximum limit wherein the loan component will be provided to any group and be able to set targets in terms of project performance and capital build-up for the initial, second and subsequent loan batches.
d) Overall, there is a need to streamline the project planning and appraisal and funding processes to cut down costs and optimized the Project Management Staff and Consultant's involvement.
Most borrowers interviewed by the IGP Consultant in the course of project indentification/planning workshops with various women's associations said that the credit line provided to members has given them regular and higher earnings from their own IGPs. In addition, some women have been engaged in paid work as fish sorter/processor of their co-participants.
This indication, however, should be supported by hard data which may have been generated by the impact survey which was conducted in July-August 1994. As it is, group members seem to remain dependent on the loan proceeds for sustaining their existing projects, but certainly, there are potentials for them to sustain higher incomes.
The following strategies may be considered to address this issue, notwithstanding the possibility of instituting an intermediary mechanism for the guarantee fund when it reverts to the control of the Provincial Government after UNFPA and FAO participation ends in December 1994 (Tripartite Review, 1993), or of project e tension/expansion in 1995.
a) Capital Build-Up (CBU)/ Savings Mobilization
The long-term sustainability of various IGPs set up through the credit component should not be hinged on the financial sustainability of the loan fund after UNFPA and FAO pull out from the project. As such, the immediately available source of working capital is the CBU. A scheme should be developed by which individual group member can access her association's CBU and the corresponding terms and conditions of fund access. One factor to be considered is the borrower's contribution to the CBU.
However, the key to continued build-up of the capital base is sustaining the project's capacities for increased incomes. Marketing strategies, technology transfer and product diversification which are discussed in the next section are some of the recommendations along this line. Some of these recommendations may be undertaken by existing or new members/ associations and may have to be financed from the guarantee fund programme (after PHI/89/P16 termination) or under the proposed extension! expansion of the project.
At this point, the recommendation in the Mission Resort of 1993 is reiterated. i.e.. the use of group savings for group-guarantee mechanism while maintaining a high level of discipline on loan repayment.
b) Marketing System
Part of the interest income from the guarantee fund may be set aside as "Incentive or Matching Fund" to be utilized for the following ancillary/support services to the IGPs:
- Input or product marketing
- Pilot testing of technologies
- Transport and delivery services
Any amount to be raised by the group members members for the above purposes be matched by the funds in proportions to be set later.
c) Technology Transfer
c.1 The PMO should be able to link women's groups to and/or enjoin other agencies to provide training on better management of projects, technical know-how on existing/new IGPs and identify suitable rural industries to supplement their household income.
c.2 As the women are trained on various capabilities, they can be tapped as trainors or resource persons in conducting echo seminars to other groups even outside the project. They may given incentives as additional source of income for this activity.
Alternative channels or lending conduits should be tapped in view of the possibility that the loan fund will revert to the control of the Provincial Government and for that matter, utilized for other purposes or moved to fund another project (Mission Report, p. 127).
However, other lending channels (also the LOP) usually extend credit only to cooperatives and hence, women's groups may have to cooperativize and register as such with the Cooperative Development Authority (CDA).
In the event the LOP does not agree to renegotiate direct agreement with the Provincial Government, without UNFPA/FAO involvement, on the bank's continued participation in the guarantee loan programme, then a rural bank or a commercial bank may be explored as a last resort. It is also the contention of this report that the guarantee loan programme would fail if the Provincial Government directly manages the loan fund.
However, in the PPCC meeting on 22 September 1994, the Province as represented by Governor Aguedo F. Agbayani and the LOP have agreed in principle to continue their involvement in the project beyond 1994.
a) The need for full time staff
If the project is extended/expanded full-time staff for the loan component should be appointed with funding support from the interest income along the following expertise: project development and appraisal, and financial analysis. Full-time staff work would be necessary as the IGPs move towards more sustainable operations and for planning packaging of asset-based projects. The involvement of full-time staff can be appreciated more in the succeeding discussion.
b) Strengthening of Project Monitoring and Evaluation System
The entry point of the Consultant's work should ideally be the assessment of the financial performance of LBP-LBP assisted projects. In the absence of data on the financial operation of these projects, the Consultant just interviewed the borrower, the association President Treasurer and the concerned Area Coordinator/Supervisor.
Nevertheless, the importance of data on the financial results of project operation cannot be overemphasized. In view of this, strengthening of the monitoring and evaluation system (Project Monitoring Tools) is proposed through addition of a Financial Management Module or the integration of the same in the appropriate module of the existing system.
The specifications of the said module can be defined later on. Basically, the system will enable the project implementor to construct the financial statements based on the actual performance of the project. These will provide a basis for extension of subsequent tranches of credit. The system should be simple and easy to follow to be able to effective and efficient, both from the point of view of the participants and the Project Staff (PMO).
Suplemental training courses should be designed and conducted to orient and familiarize participants on the basic accounting procedures, in conjunction with other training needs. The PMO, through the full-time staff for credit component, will be responsible for analysis and interpretation of financial data.
