Final presentation Emilenn

- Massey, D., et al., 1998, p.222

LeveragingLeveraging
RemittancesRemittances
ThroughThrough
Microfinance andMicrofinance and
Financial EducationFinancial Education
Emilenn Kate SacdalanEmilenn Kate Sacdalan
PhilippinesPhilippines

Problem StatementProblem Statement
• Problem: Inefficient allocation and
leveraging of remittances for
community economic development
• Causes: Inadequate financial literacy
and financial exclusion for remittance
senders and remittance receivers
• Effects: Dependency on remittance and
remittance funds not fully utilized to
bring improvement in quality of life of
senders and receivers
• Need: Financial education and access to
financial/microfinance products and
service

Target CommunityTarget Community
• Remittance Senders – Overseas
Filipino Workers (OFWs)
• Remittance Receivers
• Microfinance Institutions

Community NeedsCommunity Needs
AssessmentAssessment
• Research Design: Action Research
- Descriptive and Explanatory in
nature
• Research Method: Combination of
Qualitative and Quantitative
Research
• Sampling: Convenience Sampling
• Data Collection Tool: Desk-based
research; Survey-interview and
Focused Group Discussion

CommunityCommunity
InformationInformation
• There are more than 8.73
million Filipinos abroad
classified into OFWs,
Irregular Migrants, and
Permanent Residents
• 2007 Total OFWs -
1,515,000
• 2007 Daily Deployment
Ave. – 2,952
• 2/3 of the OFWs come
from or have families
residing in the rural
areas Sources:
POEA, CFO PECs, 2007
ADB, 2004

Philippines 14,651 12.5%
China 21,075 0.8%
India 24,504 2.7%

Sources ofSources of
remittancesremittances

StakeholderStakeholder
AnalysisAnalysis
• SEDPI/SEDPI Capital
• Remittance Senders – Filipino
Migrants
• Remittance Receivers –
Microfinance Clients
• Microfinance Institutions
• Migrant Organizations or
Diaspora
• Philippine Embassy
• Other Financial Institutions

Host OrganizationsHost Organizations
• Social Enterprise
Development
Partnerships, Inc.
(SEDPI)
• SEDPI Capital Credit,
Inc. (SEDPI Capital)
• Private organizations
providing services for
the microfinance
industry and
microenterprises

Strategic LinkStrategic Link
As CAPACITY
BUILDER –
Strengthens MFIs
as possible
SEDPI Capital
Clients
Through
RESOURCE
MOBILIZATION
provides funds to
SEDPI clients
SEDPISEDPI
SEDPISEDPI
CapitalCapital

Results of CNAResults of CNA
–Individual survey – 79
respondents
–Focus group discussion – 19
participants
–Done in cooperation with Bank of
the Philippine Islands

–Demographics:
• 85% were 31-60 years old
• Weighted average HH members –
4.84
• Weighted average of HH members
w/income (including OFW) – 2.16
• 72% have only 1 OFW abroad

– 82% are able to receive regular
remittance monthly
– USD 1,300 average remittance
monthly vs. POEA’s average of USD
300
– 75% said remittances are enough
for the household
– 45% said that remittance comprise
of 81%-100% of the household’s
total income

• Remittance Senders
–Individual Survey – 55
respondents
–Focus group discussion – 19
participants
–In partnership with Mercy Corps
–Held in Dubai, UAE

–Demographics:
• 75% are 21-30 years old
• 88% are college graduates
• 79% working abroad for one to
three years
• Female to male ratio – 3:2

– 78% send remittance once a month
– Significant positive correlation
between age and the amount of
remittance sent home
– Type of work:
• Management support services – 50%
• Sales and marketing – 28%
– “new breed” of OFWs

–Ave. Monthly salary:
• Skilled Workers: USD 1,400
• Blue Collar Workers: USD 400
–Average remittance sent is USD
400 – within the range of POEA’s
average of USD 300

– Reason for Remitting:
• Utility Bills – 34%
• Food – 33%
• Education of Children and Siblings –
20%
– 1 out of 55 respondents said that
remittance is sent to support family
members to start a business
– 21% said that remittances are not
used according to their wish

– 31% said that remittance is not
enough
– 66% send additional remittance 1-6
times a year
• Ave. Amount – USD 350
• Used for special occasions (22%);
emergency cases (16%); and
education of children or siblings
(15%)
– 24% are not able to save money

– Reason for migration:
• Earn more – 73%
• Career development – 18%
– 89% said they want to go back to
the Philippines for good
– 67% intend to work 5-15 years
more
– Want to have an ave. of USD
100,000 before returning home for
good

GoalGoal
• To reduce poverty
by leveraging
remittances and
migrant capital for
development in
rural areas in the
Philippines

R
em
ittance
R
em
ittance
Senders
Senders
Better Investm
ent
Better Investm
ent
Strategies
and
Strategies
and
Financial Security
Financial Security
R
em
ittance
R
em
ittance
R
eceivers
R
eceivers
Better Financial
Better Financial
M
anagem
ent and
M
anagem
ent and
D
ecreased
D
ecreased
Vulnerability
Vulnerability
ConceptualConceptual
FrameworkFramework

HypothesisHypothesis
• Financial Literacy and Financial
Inclusion would help remittance
senders and receivers to have
better investment strategies and
financial security, as well as
better financial management and
decreased vulnerability that
would help them improve their
quality of life

FinancialLiteracy
Training
FinancialLiteracy
Training
ReturnonInvestment
MigrantInvestments
FinancialLiteracy
Training
MF Wholesale Loans
Capacity Building
FinancialProducts/Services
RemittanceRemittance
SendersSenders
RemittanceRemittance
ReceiversReceivers
SEDPISEDPI
Microfinance InstitutionsMicrofinance Institutions
TrainingofTrainersfor
FinancialLiteracyTraining
Financial
Literacy &
Inclusion
Financial
Literacy
Training
CordaidGuarantee
Cordaid Funds for Capacity Building

ResultsResults
• Conducted 14 FinLit Training for
Remittance Senders in Netherlands,
Italy, Germany, Belgium, Denmark,
Austria, Singapore, and Hongkong
• 505 participants
• FinLit for Remittance Sender Training
Evaluations: (1 as very poor and 5 as
excellent)
– Average Trainer Evaluation: 4.71
– Average Topic Evaluation: 4.59

ResultsResults
• Cordaid Funding for Financial
Literacy Training and Guarantee
Mechanism
• OFW Investment Guarantee
– Up to PhP 250,000
– Next three years
– Option for migrant whether to take
guarantee or not

ResultsResults
Amount (in PhP)
Interest Rate
12 months w/o
Guarantee
12 months with
Guarantee
50,000 – 499,999 6% per annum 4.5% - 5% per annum
500,000 – 999,999 8% per annum 6.5% - 7% per annum
1,000,000 and above 10% per annum 8.5% - 9% per annum
• Before investing...
– “rainy days” savings equivalent to at
least three months of monthly salary
– Insurance plan

ResultsResults
• Average of 10% each training
pledged for investments and 51%
expressed their interest of
investing
• Cordaid Funding for Capacity
Building
• 10 Microfinance Institutions
Reached for Capacity-Building
• Investment on MFIs would have a
term of one year or more

Further PlansFurther Plans
• July to December will focus on
Remittance Receivers
• Map current participants
overseas with their hometowns
• Continued Capacity Building
for MFIs

Issues / ConcernsIssues / Concerns
• Lack of Resources – time and people
• Training Time
• Marketing
• Training of Trainers
• Different educational levels of
participants
• Microfinance Institutions and the
delivery of their products and
services

Lessons LearnedLessons Learned
• Projects don’t always go
exactly as planned
• Importance of market research
• Involvement of stakeholders
• Integration and collaboration
with other development-
oriented groups or
organizations

RecommendationsRecommendations
• Further implementation of the
project
• SEDPI has to improve its human
resource
• Form links with other stakeholders
• Further research on the needs of
stakeholders
– Higher level training
• Follow-up on the trainings
• Follow-up on the financial inclusion
aspect

Maraming Salamat Po.Maraming Salamat Po.

Final presentation Emilenn

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