PagIBIG Fund innovates to build more roofs for Filipino employees
The Home Development Mutual Fund (HDMF), also known as the “PagIBIG” Fund, has been innovating to be of better service to the Filipino employers as well as their employees. One of its latest innovations is the first “needs matching” project in North Luzon in partnership with the Hanjin Heavy Industries and Construction Company to come up with the “Hanjin Employee Village”, a socialized housing project for Hanjin’s shipyard workers who are PagIBIG Fund members. The project allows the employee-beneficiaries to pay for the land, land development, and house construction at significantly lower costs. This is part of Hanjin’s commitment to have a community that will promote the welfare of the efficient shipyard employees and their families. For its part, PagIBIG Fund was more than happy to participate in this corporate social responsibility project which doubles as an employee-retention program of Hanjin by providing the housing and developmental finances for the project.
In line with this project, PagIBIG Fund expects to generate a total loan portfolio amounting to PhP1.27 Billion or USD28.51 Million for the 22,775 house and lot units that will be built over a period of three years. As of January 20, 2015, PagIBIG Fund has taken out the housing loan applications of 731 of the 820 units delivered, or PhP354.312 Million worth of loan take-out. As of the same period, the reserved units number 997, constructed units 997, and occupied units 752.
The Hanjin Employee Village is a testimony of the responsiveness of PagIBIG Fund in meeting a very specific need of its partners, in this case, the employer Hanjin Philippines, in providing shelter finance. PagIBIG Fund’s ‘Needs Matching Program’ – the Hanjin Employee Village” was a recipient of Merit Award in the 2015 ADFIAP Outstanding Development Project under Infrastructure Development category.
ASKI’s renders holistic financial inclusion programs for Filipino migrant workers
Migrant workers hugely contribute to the economic development of many developing countries, including the Philippines. The Alalay sa Kaunlaran (Partner in Progress) Inc. (ASKI) is seeking ways to help these migrant workers improve their lives.
Since 2010, the Singapore-based ASKI Global Ltd. has been focusing at providing Filipino migrant workers with access to appropriate financial services, and this leads in the development of the first model of cross-border microfinancing in Asia. Cross-border microfinancing, the ASKI Global way, involves overseas Filipino workers (OFWs) – initially those based in Singapore, along with their respective families in the Philippines, to embark in financial activities that lead to the realization of dreams of having sustainable and sufficient sources of income in the home country and be reunited with their families. The first step towards availing this program is for the OFWs and their families to have close consultation with ASKI Global. The family, then, avails of a business loan from ASKI Microfinance. In areas where ASKI has no operations, the loan is provided by an ASKI microfinance institution-partner. The family operates the business in the Philippines and the relative OFW pays for the loan through his or her monthly remittances. This model is ASKI’s response to the call for financial inclusion of OFWs and their families.
ASKI Global also partners with the ASKI Skills and Knowledge Institute, Inc to provide back-to-back financial and values education to OFWs and their families to ensure that the families will appreciate the hard work of the OFWs and to value every cent of the remittance sent home.
To further serve the OFW and their families, ASKI Global developed the Financial Education (FinEd) Course that teaches participants financial competence, financial responsibility or taking control of their financial decisions and taking risks to pursue financial goals. To date, 2,070 migrant workers including Filipinos, Malay, Singaporeans, Indonesians and Sri Lankans have graduated from the program under the Financial Education, Basic Entrepreneurship, and Personality Development modules. Some of them have already established their businesses back home and reunited with their families.
ASKI’s program “Back-to-Back Training for OFWs and Their Families” was given a Merit Award in the ADFIAP 2015 Outstanding Development Projects under Human Capital Development Category.
FSMDB steps up development efforts, sets up training institute
Human resources is an important factor in every business’ success and the need to provide it with proper training and propriety is vital. Thus, the Federated States of Micronesia Development Bank (FSMDB) has put up the FSMDB Development Finance and Training Institute which serves as the training center to plan, conduct and administer relevant training programs for the Bank’s clients, employees, officers and other stakeholders. The institute will implement, facilitate, coordinate and provide staff development and training programs as well as clients training. With the establishment of the Institute, the Bank’s efforts to upgrade business knowledge and skills will be enhanced. It will provide opportunities for locals to banking and financial training programs provided by the various regional and international financial organizations. Additionally, the Institute will ensure sustainability through continuous efforts to seek development and financial assistance grants from the government, donors, and other financial agencies.
Overall, the FSMDB believes that the provision of more training to employees and clients will lead to a better understanding of the business environment and exposure to business best practices. Training will also ensure entrepreneurial success in the private sector and will ensure better use of financial assistance, business success and increased collaboration between the private sector and the government.
FSMDB’s “Establishment of FSMDB Development Finance and Training Institute” was given a Merit Award in the ADFIAP 2015 Outstanding Development Project under the Human Capital Development category.
DFCC finances first grid connected solar project in Sri Lanka
Solar energy has been touted as the green energy category with the highest potential and the future of Sri Lanka’s green energy drive. It is a resource that is not only sustainable for energy consumption but also renewable. DFCC bank leads the way in financing renewable projects undertaken by the private sector in Sri Lanka. In August 2014, DFCC Bank financed Sri Lanka’s first commercial scale grid-connected Solar Power Project with a term loan of Rs850 million (approx., USD6.5 million) out of a total cost of Rs 2.5 billion (approx. USD19 million).
Financing renewable energy project in Sri Lanka is based on a 20-year tariff agreement, where the project developer enters an agreement with the government for 20 years. Using this, DFCC structured the financial solution sought by the borrower and will be assisting the promoter from concept to completion. The project is under implementation and expected to be completed this year. When completed, it will help reduce government’s reliance on high cost, environmentally unfriendly thermal power projects. This will also set the stage for the other energy developers and equity investors to increase their focus on this sector.
This project was given a Merit Award in the ADFIAP 2015 in the Outstanding Development Project Award under the Environmental Development category.
VDB’s funds wind power plant project, reduces country’s fossil fuel dependency
Electricity in Vietnam is heavily dependent on fossil fuel until Vietnam Development Bank (VDB) has invested in the construction of the Bac Lieu Province Wind Power Plant. The construction included a near-shore wind power farm with an area of 540 ha. along the East Dam (De Dong) of Bac Lieu City, Bac Lieu Province, Vietnam. It has a 99.2 MW and gross annual electricity output of 335.2 GWh and it involves the installation of 62 wind turbines at capacity of 1.6 MW each in two phases. The Phase 1 of the project has installed 10 wind turbines on 83.2 ha area and the net electricity output is 16 MW and 55,355 MW/year, respectively. The Phase 2, which is under construction, includes the installation of the remained 52 turbines with combined capacity of 83.2MW and annual net output of 272, 471MW.
The purpose of this project is to produce and supply electricity to the national grid under a Power Purchase Agreement signed with the Electricity Corporation of Vietnam (EVN). Once finished, the project will reduce the emission of greenhouse gases by replacing electricity generated from fossil fuel fired power plants with zero emissions electricity from a wind power plant. It is expected that the power plant, when in full operation, will result in the reduction of 143, 761 tCO2 on average and 1,006,328 over the first crediting period.
VDB’s “Wind Farm Project in Bac Lieu Province” was given a Merit Award in the ADFIAP 2015 Outstanding Development Project Award under the Environmental Development category.
DBJamaica’s provides guarantees, spurs banks to lend more to SMEs
Anchored by its determination to help the SME sector grow and guided by its research conducted in 2009 on the challenges that SME faces in accessing finance, the Development Bank of Jamaica (DBJ) has implemented several SME initiatives including a partial credit guarantee program called the ‘Credit Enhancement Facility’ (CEF). The CEF addresses these challenges by providing partial loan guarantees to banks to enable them to make more loans to SMEs, and sharing loan losses on a pari passu basis. The CEF guarantees may be issued to support SME loans that either do not have sufficient collateral to meet the banks requirements or that the bank considers risky.
Under the CEF, banks may apply for partial loan guarantees up to JA$15 million (US130,000) or 50% of the value of a loan made to SME. In the case of energy efficiency and renewable energy projects, the CEF provides coverage of up to 80% up to a maximum of JA$15 million. To encourage the implementation of energy efficiency and renewable energy projects, SMEs may access up to JA$15 million or 80% guarantees for these projects, while those who are just starting a business, say a period of less than 12 months, they may access DBJ guarantees of up to 80% or JA$5 million (US$43,000) on loans below JA$6.25 million (US$54,000).
Since its inception up to December 2014, the DBJ has provided 176 CEF guarantees of JA$380 million allowing SMEs to access loans of over JA$780 million through ten (10) financial institutions (FI). The issued CEF guarantees have impacted the Agriculture, Services, Manufacturing, and Agro-processing sectors with Agriculture accounting over 50%, the Service sector 30%, and the Manufacturing sector 14% of the guarantees issued.
To further increase it utilization, the DBJ recently amended the CEF to make it more attractive by increasing the amounts guaranteed as well as improving the payouts available to banks.
DBJamaica’s “The Credit Enhancement Facility” was given a Merit Award in the 2015 ADFIAP Outstanding Development Project under the SME Development category.
ODB implements loan guarantee program to promote SME development
SMEs are considered the backbone of many nations, generating job employment, contributing to industrial as well as economic development, etc. For many years, the Oman Development Bank (ODB) has been helping SMEs to thrive. It is the only Government-owned development bank that promotes SME development by providing subsidized term-loans with fixed interest rates and longer moratorium and repayment term. As government-institution, ODB lend only to sectors specified by the government. ODB is providing loan of up to 56% of the total project cost subject to a ceiling of RO 1 million (USD2.58 million).
To be more of help to SMEs, ODB has implemented the Loan Guarantee Program (LGP), which was conceived and developed under the aegis of the Directorate of SME Development (currently the Public Authority for SME Development) in the Ministry of Commerce & Industry, Sultanate of Oman. The LGP is the customized version of the 7A program implemented by the Small Business Administration, (SBA) United States of America. Under the LGP, enrolled commercial banks are encouraged to provide financial assistance of up to RO250,000 (USD650,000) to SMEs eligible under the program. Eligible small business applicants must: 1) be organized for profit; 2) be owned by an Omani Citizen; 3) be located in Oman; 4) be a small/medium enterprise (as defined by MOCI/ODB); and 5) demonstrate a need for the desired credit.
As the lead agency in implementing the program in Oman, ODB developed the Standard Operating Procedure (SOP) documents which would provide the necessary guidelines, templates and forms for the smooth implementation of the project. Commercial banks empanelled in the program were designated as lenders while ODB guarantees of up to 50% of such loans provided by commercial banks to SMEs. ODB’s guarantee reduces the requirement of collateral security by lenders, a boon to SME customers, especially to the first generation entrepreneurs. The program is attractive to commercial banks as ODB guarantees 50% of the loan and thus reduces their risk, so to with SMEs as they get loans without providing much of the securities.
The program has already resulted in the provision of financial assistance to about 76 SME business ventures in Oman. ODB and commercial banks enrolled in the program worked as a team in implementing the project where the commercial banks have already loaned the amount of RO 8.4 million (USD21.8 million) to SME projects, while ODB had already provided guarantees worth RO 4 million (USD10.4 million). These SME projects involved in the program were mostly owned by young entrepreneurs, including women.
ODB’s “Implementation of Loan Guarantee Program” was given a Merit Award in the 2015 ADFIAP Outstanding Development Project) under the SME Development category.
CESMED, VCCI team up to promote trade development in Vietnam via SMARTEX
Trade development, whether it be locally or internationally, is a vital ingredient in the overall economic development of a nation. This can help boost development and reduce poverty by generating growth through increased commercial opportunities and investment as well as broadening the productive base through private sector development.
Cognizant of the needs for an avenue to promote trade, the Centre for SME Growth and Development Finance (CESMED) and the Vietnam Chamber of Commerce and Industry (VCCI) Da Nang have joined hands in the design and implementation of the SME Market Exchange (SMARTEX), an innovative and comprehensive trade development programme, designed to carry forward the objectives of the SME Market Information and Development Programme (SMIDP). SMIDP is a comprehensive venture of Vietnam Chamber of Commerce and Industry (VCCI) Da Nang to assist its member-companies operating in 11 Provinces of Middle and Central Highlands Region of Vietnam, with three (3) fold objectives to: (i) serve as reservoir of latest market intelligence; (ii) build export preparedness and competitiveness of the member companies for international trade; and (iii) showcase the business strength, products and services of companies to enhance their share in the domestic and global markets.
To date, there are already 1,185 member companies details from 11 associations uploaded in the SMARTEX website and a series of capacity-building and awareness camps have been conducted as well as linking of 11 Association websites to SMARTEX website have been achieved in 2014 as planned. The SMIDP/SMARTEX is an innovative and demand-driven project quite relevant to the socio-economic context of Vietnam. It also aimed at promoting a ‘mutual trade-led growth’ internationally. In addition, commercializing SME innovations is yet another innovative feature of this project which VCCI Da Nang is operating under the on-going “Innovation Promotion Programme” (IPP) of Finland-Vietnam.
CESMED, VCCI Da Nang’s SMIDP-SMARTEX projects was given a Merit Award in the 2015 ADFIAP Outstanding Development Projects under the Trade Finance Development category.
DBS undertakes government’s agricultural competitiveness program
The Development Bank of Samoa (DBS) together with Small Enterprise Centre (SBEC) have been the lead agencies in the implementation of the Samoa Agriculture Competitiveness Enhancement Project (SACEP), a development partnership initiative between the Government of Samoa and the World Bank (WB).
The development objective of the SACEP is to support fruit and vegetable growers and livestock producers to improve their productivity and take greater advantage of market opportunities. There are three components to the project. The first component of the project is livestock production and marketing. The objective of this component will be to encourage interested livestock producers to upgrade livestock, improve husbandry practices and stock management, make productivity enhancing on-farm investments, and improve the quality of meat sold in the local market. The second component of the project is fruit and vegetable production and marketing. The objective of this component will be to enable interested fruit and vegetable growers to have access to new, higher yielding varieties, adopt improved technology and production techniques, make productivity enhancing on-farm investments, and organize themselves to strengthen their presence in the market and meet the demands of local retailers and foodservice operators for year-round supplies of fresh fruits and vegetables. The third component of the project is institutional strengthening. The objective of this component will be to improve the effectiveness of agricultural institutions (government and non-government) providing extension and adaptive research services to Samoan farmers; and the ability of these same institutions working individually or in collaboration with each other to implement and monitor the project effectively.
For its part, DBS is committed to provide credit financing to fund the 30% contribution of farmers who are unable to afford it to meet their 50% contribution. The commitment includes a reduced interest rate of 8%, a grace period of 6 to 12 months and term limit of 4 years. Since implementation, DBS has prioritized lending to SACEP to enable immediate response to farmers needs.
As of December 2014, 110 loan applications have been approved and disbursed valued at USD 831,174. Approval is allocated at 85% livestock and 15% fruit and vegetables. The project has generated huge interest from the farmers and will continue over 5 years. The success of the farmers will trickle down to their partners and supports local economic development.
SACEP: A Development Partnership was a recipient of a Merit Award in the 2015 ADFIAP Outstanding Development Project Awards under the Local Economic Development category.
TDB enhances private sector development through growth fund
The Tonga Development Bank (TDB) is implementing the Government of Tonga’s Growth Facility and Student Loan Scheme or also known as ‘Government Managed Fund’. The Fund has allocated T$3.05 million for disbursement of viable loans to the public at 1.0% interest, and up to T$10 million was allocated for disbursement of viable loans to the public at 4.0% interest, targeting growth key sectors and industries in Tonga.
The Government of Tonga, in collaboration with TDB, continue to focus on the development of the private sector as the engine of growth. This will help raise the government revenue which will provide more services to the public. The Fund finances key sectors of the economy that will encourage growth in economic activities including the following: (i) Agriculture Marketing and Production Fund, (ii) Fisheries Development and Export Fund (iii)Tourism Loan Fund, (iv) Manufacturing Loan Fund, (v) Livestock Loan Fund, (vi) Forestry Loan Fund, (vii) Construction and Utilities Loan Fund, (viii) Retail & Wholesale Loan Fund, (ix) Other Priority Sectors, (x) Student Overseas Tertiary Education Loan Fund.
As of December 2014, the Fund has already disbursed the amount of T$2.3 million to 34 clients in different sectors all over the country.
TDB’s ‘Government Managed Fund’ was given a Merit Award in the 2015 Outstanding Development Project Awards under the Local Economic Development category.
IIB prioritizes SME support for economic development in member-states
Providing access to finance for SMEs in the member-states of the International Investment Bank (IIB) is one the main focus of IIB’s activities. Hence the development of the “SME Support Program”, an important step for IIB to pursue its Development Strategy for 2013-2017 as well as its Country Strategy for 2013-2015. The strategic purpose of this program is to promote accessibility of credit resources for SME entities in segments that procure sustainable development of the IIB member states. As part of it strategy, IIB closely cooperates with the countries in Asia-Pacific, particularly two (2) of its member-states–Mongolia and Vietnam. The program supports sustainable development and poverty alleviation of these nations in particular and the Asia-Pacific region in general.
According to IIB framework agreements, financial intermediaries disburse funds received under the “SME Support Program” to local and medium-sized companies, giving priority to sustainable and social development projects. In implementing the Program, IIB applies a two-stage scheme of lending that involves financing of SMEs through a network of agents (financial intermediaries), commercial banks, leasing companies, etc., This scheme has been applied in Mongolia and Vietnam as the SME sector plays a vital role in growth and development of these nations. According to the Bank’s monitoring data, more than 300 SME entities from these nations (final beneficiaries) have already received financing from the IIB’s partners under the SME Support Program.
The SME sector has been the priority of all IIB member states as this sector is considered to be a catalyst of economic growth, innovations, and progress. In line with this, IIB considers to further intensify its SME support loan operations in Europe and the Asia-Pacific region.
IIB’s ‘SME Support Program’ was given a Merit Award in the 2015 ADFIAP Outstanding Development Project) under the Financial Inclusion category.
RCBC encourages children to save early via W.I.S.E.
Helping children realize the importance of saving has always been one of the key thrusts of RCBC Savings Bank (RSB), one of the largest thrift banks in the Philippines. Thus, RSB designed the W.I.S.E (Wise Investors Save Early), a personal savings account primarily designed for children. The WISE product is in support of the new program launched by the Bangko Sentral ng Pilipinas (BSP) called the Banking On Your Future (BOYF) Kiddie Account Program. RSB is supporting this initiative that aims to raise the country’s savings rate by promoting the habit of regularly saving money. Together with the support of the Bank Marketing Association of the Philippines (BMAP), the W.I.S.E. program encourages children to open an account with initial deposit of P100 at any of the bank’s network of branches. This program recognizes the importance of teaching children the value of money and the benefits of saving while they are young.
RSB have deployed its bank personnel to various schools to promote the BSP initiative and encourages kids, together with their parents, to open a W.I.S.E savings account. To date, the Bank has over 108,000 accounts since the launching of this product in December 2013 and P1 billion worth of deposits.
RSB’s “W.I.S.E Savings Account On You Future” program was given a Merit Award in the 2015 Outstanding Development project under the Financial Inclusion category.
DBRB provides access to education for children in rural areas via school bus project
The quality of education given to school children is essential to bring out their full potential and the provision of safe school buses transporting them to quality schools is important as well. The Development Bank of the Republic of Belarus (DBRB) has been in cooperation with the Government of the Republic of Belarus in providing quality education for children in Belarus residing in rural areas. For its part, DBRB has designed the “School Bus Project” to help transport school children from small villages lacking schools to the nearest educational institutions. As part of the project, DBRB plans to purchase at least 300 units of specially equipped school buses within the period 2013-2017. DBRB is going to invest over USD 20 million for this project.
The benefits of the “School Bus Project” includes increased availability of educational services for children from rural areas; creation of equal conditions of obtaining high-quality general and supplementary education in rural areas; lessen the risk of car accidents, children’s death and injuries during transportation by school buses; renovation of the worn out and outdated vehicle park that do not meet safety requirements of children’s transportation.
New school buses, designed specifically for rural areas, enable to transport approximately 6000 children everyday by operating within more than 300 routes with total length of more than 10,000 km. As part of the Program, women are welcome to apply as bus school bus drivers.
DBRB’s “School Bus Project” was a recipient of a Merit Award in the 2015 ADFIAP Outstanding Development Project Award under the Corporate Social Responsibility category.