I Financial Markets International, Inc. 
MID TERM EVALUATION 
SUBMITTED TO 
USAIDManila 
FINANCIAL MALTCETS INTERNATION&, Inc. 
SEGIWFS Contract 3 PCE-I-00-99-000 10-00 
May 23,2000 
7735 Old Georgetown Road 
Suite 3 10 
Bethesda, Maryland 208 14 
Tel. 30 1-21 5-7840 
Fax 301-215-7838 
fin&@%-inc-net 
TSEE OF CONTENTS 
Executive Summary 
I. Background 
II. Micro Enterprise Access to Banking Services in Mindanao (MABS-M) 1 
A. Anticipated MABS-M Results 
B. MAB S-M "Pilot Phase" Evaluation 
111. Mid-Term Evaluation 3 
A. Scope of Work 
B. Evaluation Methcdology and Activities 
IV. Findings 5 
A, Program Management 
B. Progress Toward Satisfying Targeted Results 
C. Progress Toward Satisfjmg Major Tasks 
D. Progress Toward Satisfying Related Subtasks 
E. MABS-M Impact on Participating Banks and Potential For Micro 
Enterprise Service Sustainability 19 
F. MABS-M Impact on Borrowers 
G. MABS-M Impact on RBAP/RBRDFI 
V. Recommendations 
Finnncial Markers International, Inc. (FiMr) USAID MASS - M P~oject 
EXECUTIVE SUMMAaY 
I. BACKGROUND 
In January 1988, USAID and the Rural Bankers Association of the Philippines 
initiated the Micro Enterprise Access to Banking Services in Mindanao (MABS-M) 
Program. The (MABS-M) Program is intended to provide micro entrepreneurs in 
Mindanao with greater prospects for profitability and growth by facilitatin, = access to 
efficient, reasonably priced financial services. The Program hopes to remove the 
constraint to more widespread economic growth of Mindanao by providing greater access 
to formal financial semices to the small producers and mircroenterprises who have 
traditionally relied on expensive informal credit sources. 
The Program was designed for operation through the unique system of Rural 
Banks and Cooperative Rural Banks (BBICRB) that operate throughout the country, 
including in most areas of Mindanao. MABS-M was implemented in coordination with 
the Rural Bankers Research and Development Foundation Incorporated (RBRDFI), the 
Rural Bankers Association of the Philippines (RBAP) and the Office of the Presidential 
Assistant for Mindanao (OP-MIN). Program design included extensive training and 
technical assistance to participating banks to prepare them to provide services profitably 
to the micro enterprise sector. MABS-M was also expected to demonstrate the 
profitability of well-managed financial services to micro businesses, thereby encouraging 
other banks to enter the market as well. MABS-M support provided to participating 
banks is mainly technical assistance and training. Some limited commodity support and 
software is also provided. No lending funds or capital contributions are provided to 
participating banks. 
Under the Program, at least 20 Rural Banks in Mindinao are receiving assistance 
enabling them to profitably provide services to the microenterprise sector. It is hoped 
that these rural banks will adopt these lending services as a regular part of their business 
and that other Rural Banks to expand their services to the microenterprise sector. At this 
point, the Program is about midway through its planned four-year life. 
Chemonics International was contracted by USAID to implement and manage the 
MABS-M. Several specific performance results and tasks were included in the contract, 
but the definition of implementation strategy and methodology was left to the discretion 
of the contractor. The Chemonics "MABS-M Team" began operations in January 1998 
fkom offices arranged by the RBAPRBRDFI in Davao City, Mindanao. The MABS-M 
Chief of Party was expected to work closely with the Executive Director of the RBRDFI 
to plan key implementation activities. Other working relationships included the 
establishment of an Activity Steering Committee to provide overall policy guidance and a 
Management Committee to provide guidance/support in connection with implementation 
matters. 
MABS-M anticipated results included preparing at least 20 participating banks to 
profitably provide financial services involving micro loan portfolios totaling at least 
Financial Markets International. Inc. (FM) 1 USAID MBS - M Project 
8,000 new borrowers and at least 15,000 new depositors. The Program was also expected 
to result in full integration of micro financial services with the main course of business of 
at least one-half of the participating banks. Other contracted tasks included assisting 
RBAP to develop the institutional capacity to provide ongoing technical assistance to its 
rural bank members, cooperation with USAID sponsored policy reform and other efforts, 
and the development of a micro enterprise related database for monitoring the progress of 
all USAID micro enterprise programming. 
11. EVALUATION SCOPE OF WORK AND APPROACH 
At the mid-tern of the project in March 2000 USAID contracted the services of 
Financial Markets International, Inc.(FMI) to ". . .assess the progress of the MABS-M 
Program and identify areas where the Program might be stren-gthened or otherwise 
modified. 
FMI consultants determined that progress and effectiveness of the MABS-M 
Program could best be evaluated by assessing: 
The progress toward satisfying the specific performance targets and tasks; 
The impact that the Program is having on beneficiaries; and, 
The sustainability of Program accomplishments. 
During three weeks in Mindanao and several days in Manila, the evaluators 
reviewed documents, conducted extensive interviews, attended MABS training events, 
and formally surveyed participating banks and micro entrepreneur beneficiaries. 
MABS-M is well managed. Having recovered fi-om the management problems that 
delayed the initial stages of implementation, MABS-M is generally on, or ahead of, 
schedule toward satisfying the project objectives. The Project managers have followed . 
an aggressive strategy of program strengthening that has resulted in a strongand well￾focused program 
MABS-M has been efficiently managed through a system of specific work plans that 
have facilitated the development and deployment of programs of technical assistance 
and training to participating banks. 
The Program has made substantial progress toward satisfying all the results that are 
specifically targeted in the MABS-M contract. By the scheduled end of the project in 
September 2001, it is probable that all targets will have been satisfied or surpassed. 
Twenty banks have received MABS-M training and technical assistance. Fourteen 
banks are providing financial services to a growing number of micro entrepreneurs, 
and six additional banks will begin lending in June 2000. It is anticipated that the 
. . Financial Markets International, Inc. (FM) 11 USAID MABS - A4 Project 
Program will prepare a total of 32 banks and bank branches to service micro 
entrepreneurs by September 200 1. 
Nearly 3,000 new micro borrowers and 12,000 new depositors were generated by the 
project by March 2000. MABS-M is projected to reach at least 10,000 new 
borrowers by September 200 1. 
All 20 participating banks are projecting significant micro Rnance service 
profitability and are in the process of incorporating micro finance as major 
component of their businesses. 
Implementation of the technical assistance, training and other activities has proceeded 
efficiently and on schedule. On-going technical assistance is helping to maintain a 
"micro finance culture" within the banks that have already completed their initial 
T.A. and training. 
Bank survey results indicate complete satisfaction among bank owners and staff with 
MABS technical assistance and training. They credit training in the MABS 
methodology with health of their new micro loan portfolios. All participating banks 
are experiencing virtually no delinquency with their MABS lending. 
The Program is providing positive demonstration effect on non-participating banks in 
Mindanao. RBAP has received numerous requests for Program participation, and 
many non-participating banks are attempting to install aspects of the Program 
methodology on their own. 
The "MABS Approach" and "best practices methodologies" that are being promoted 
by the Project have been fully adopted by participating banks. Interviews with 
bankers showed no indication of dissatisfaction. Several of the surveyed bank 
managers are incorporating the techniques that they have learned through MABS 
training and technical assistance in their non-micro lending operations. 
MABS-M has made satisfactory progress with RBAP institutional development planning 
efforts. The Program has sponsored several planning activities intended to facilitate 
RBAP institutional development, including the development of a Strategic Development 
Plan. Although there is little evidence to date of institutional strengthening, RBAP 
leadership enthusiastically supports MABS-M programming and recognizes that RBAP 
must prepare its organization to provide ongoing support for the micro finance services of 
its membership. 
. ... 
Extensive review of MABS-M files, discussions with MABS-M sfaff and 
interviews with managers of other USAID supported activities reveal that 
reasonable effort has been made to coordinate -WS-M implementation with 
other specific USAID supported micro finance related activities. 
MABS-M reporting procedures and other program documentation are complete and 
accessible. The program management information system continues to be a work-in￾progress. The level of effort required for development and installation of a 
comprehensive MIS has proven far greater than anticipated. The new system is expected 
to be operational in February 200 1. Interim reporting arrangements with Participating 
Banks are functioning satisfactorily. 
Financial Markets International, Inc. (FMI) iii USAID MBS - M Project 
Increase the level of MABS-M fundinn during the balance of the current contract term. 
USAID should allocate sufficient increased funding to enable the Program to 
continue operating at its current level of efrort through the September 30,2001 
completion date. 
The recommended increased funding would significantly increase impact by 
providing ongoing support for current ~art.ici~&n~ Banks in order to-assure that their 
long-term commitment to the MABS Approach is thoroughly institutionalized. 
An updated plan and budget should be developed for MABS-M operation through 
September 2001 that would accommodate any changes that are determined to be 
necessary, including those that may be made as a result of this evaluation. 
MABS-M should place stronger emuhasis on preparing RBAP to assume resuonsibility 
for long-term Pro,gam continuitv. 
One of the major tasks assigned to the MABS-M Program is to develop the 
capabilities of RBRDFI/RBAP to mount its own program of assistance to RBsICRBs 
to help them to develop the capability to profitably provide services to micro 
enterprises. MABS-M management should develop a specific work plan to complete 
and implement RBAP institutional development plans. 
MABS-M should strenrrthen its policv dialogue particiuation with Credit Policv 
Improvement Program (CPIP). 
CPIP management has indicated interest in enga,oing MABS-M and RBAP as 
partners in its policy dialogue efforts with the Philippine government. MABS-M 
management should incorporate specific coordination with CPIP into its work plans 
for promoting a micro finance agenda with the Central Bank. 
MABS-M management should continue to refine. standardize and reduce the cost of the 
"MABS A~proach". 
MABS-M is now in a position to consolidate the impressive progress that it has made 
with the development of the MABS methodology. Long-term sustainability of the 
MABS-M initiative will depend heavily on the ease with which the 'MABS 
Approach" can be assimilated by increasing numbers of RBsICRBs. 
USAID should fund the MABS-M program for an additional two years. 
Objectives for Program extension include: 
Financial Markets International, hc. (FM, i~ US&D MABS - M Project 
Maximum emphasis on RBAP institutional development and the appropriate and 
efficient transfer of the "MABS Approach" methodology to RBAP. 
Continue to provide "maintenance" support, as necessary, to Participating Banks. 
Expand to new Participating Banks and branches, particularly in areas not currently 
served, in Mindanao and, perhaps, in other parts of the Philippines. 
Initiate an assessment of the potential for expanding the program beyond Mindanao. 
USAID managers have indicated interest in possible MABS-M expansion, and RBAP 
leadership has expressed strong interest in expanding the Program into the Visayas and 
Luzon. Having invested considerable resources in the development of the MABS-M 
Program model, it would also be appropriate to consider potential for its introduction in 
other countries. Program expansion during the balance of the current contract will 
require additional funding. Any initiative to expand the Program beyond Mindanao 
should be led by RBAP with relatively limited technical support fiom the contractor. 
Financial Markts International, Inc. (FMT) v USAID MABS - M Project 
MID TERM EVALUATION 
After years of lag,@ng seriously behind the rest of the country, the Mindanao 
economy is showing signs of more rapid economic growth. Mindanao GDP is growing at 
rates similar to, or faster than, the country as a whole. The Philippine government has 
increased its investment attention to Mindanao, and there are indications of increased 
confidence in the region by domestic and foreign investors. There is widespread concern, 
however, that the poorer segments of the population will not share the benefits of 
Mlndanao ' s growth. 
Given the importance of micro entrepreneurial activity to the economy of 
Mindanao, a healthy micro enterprise sector is considered essential to the economic well 
being of the region. However, the majority of micro enterprises in Mindanao have no 
access to financial services from the formal banking system. Most surveys indicate that 
less than 10% of micro entrepreneurs have ever utilized the services of a bank. Micro 
enterprises generally borrow fiom private moneylenders, lending investors and 
pawnshops at interest rates of 20% or more per month. This lack of access to reasonably 
priced, high qdity f~nanciai services poses a significant constraint to accelerating the 
region's economic growth, and puts micro enterprises at a disadvantage to larger 
businesses. 
RURAL BANKS AND COOPERA'T?VE RURAL B&WS 
Of particular interest to micro enterprise development efforts is the uniquely 
Philippine system of privately owned and locally managed Rural Banks (RBs) and 
Cooperative Rural Banks (CRBs). These banks, of which there are over 800 nationwide 
and 130 in Mhdanao, have extensive experience with the provision of financial services 
to small borrowers and savers. It was determined that, because of their experience and 
position in the marketplace, the RBs and CRBs represented the most promising vehicles 
for developing efforts to provide sewices to the micro enterprise sector of Mindanao. 
The Micro Enterprise Access to Banking Services in Mindanao (MABS-M) 
Program was designed for implementation in coordination with the Rural Bankers 
Research and Development Foundation Incorporated (RBRDFI), the Rmd Bankers 
Association of tlie Philippines (XE3AP) and the Office of the Presidential Assistant for 
Mindanao (OP-MIN). MABS-M was intended to expand banking services (both lending 
and savings) to micro enterprises in Mindanao through RBs and CRBs. The Program 
design included extensive training and technical assistance to Participating Banks to 
prepare them to provide services profitably to the micro enterprise sector. MABS-M was 
also expected to demonstrate the profitability of well-managed financial services to micro 
businesses, thereby encouraging other banks to enter the market as well. 
The USAID / Chemonics contract assigned specific performance results and 
tasks, but left most of the definition of implementation strategy and methodology to the 
discretion of the contractor. Chemonics established and staffed offices in Davao City in 
Mindanao. The "MABS-M Team" began operations in January 1998 fkom offices 
arranged by the RBAPRBRDFI. The contractor's Chief of Party was expected to work 
closely with the Executive Director of the RBRDFI to plan key implementation activities. 
Other working reIationships included the establishment of an Activity Steering 
Committee to provide overall policy guidance and a Management Committee to provide 
guidancelsupport in connection with implementation matters. 
A. ANTICIPATED MABS-M RESULTS 
MABS-M Program designers anticipated that the Program would achieve the 
following specific results by the end of the Program in September 200 1 : 
At least 20 Rural Banks/Cooperative Rural Banks were expected to receive 
assistance through the MABS-M Activity; 
Each of the 20 Participating Banks was expected to have an outstanding loan 
portfolio of at least 500 micro loans; 
A total of at least 8,000 micro loans were expected to be outstanding; 
Each of the Participating Banks was expected to have enrolled about 1,000 new 
micro enterprise depositors, and a total of at least 15,000 depositors was expected 
among all 20 Participating Banks 
At least half of the Participating Banks were expected to have decided to make 
micro enterprise services a continuing and signif~cant part of their portfolios, and 
to have taken steps necessary to properly and profitably serve the micro enterprise 
market. 
The contractor was also expected to accomplish the following major tasks: 
Task 1 : Following the development of appropriate procedures and criteria, at 
least 20 banks were expected to be selected to participate in MABS-M Activity 
and agreements would be drawn up between the MABS-M and the Participating 
Banks in which specific obligations and expectations would be established for 
each party. The agreements were intended to state the commitments made by the 
Participating Banks and the contractor's contribution toward helping banks to 
profitably deliver services to the market. 
Task 2: The contractor was expected to design and implement training, technical 
assistance and other programs for the Participating Banks (intended to help 
Financial Markets International, Inc. (FMI) 1 USAID MBS - M Project 
develop the capabilities of Participating Banks to profitddy service a micro 
enterprise market). 
Task 3: The contractor was expected to develop the capzbility of the 
RBRDFIRJ3A.P to mount its own continuing Program of assisthg RBsICRBs to 
develop the capability to profitably service a micro enterprise market. 
The following related subtasks were also included in the contract: 
Become familiar with other micro finance activities supported by USAID; 
Identify and assist with the creation of affiliation arrangements among 
Participating Banks and other RSsICRBs that would be helpful in the overall 
effort to enable banks to profitably provide micro financial services; 
Provide advice and assistance needed by several (AID identified) NGOs to 
convert themselves into banks; and, 
Collect regular data on financial services provided in Mindanao to micro 
enterprises and lower socio-economic groups as needed by USAID to measure 
MABS-M and USAID Strategic Objectives progress and for other purposes. 
B. MABS-M "PILOT PHASE" EVALUATION 
In recognition of the experimental nature of the Progm and the dynamic 
condition of the Philippine financial sector and related legdregulatory environment, 
USAID determined that the first year of WS-M implementation would be viewed as a 
pilot phase. Following the first year, a formal review was scheduled to determine if the 
activity should be continued and, if so, what modifications might be required. 
The scheduled review of the MABS-M Pilot phase was completed in March 1999. 
The review noted that mzjor management problems had plagued the first two quarters of 
the Program implementation. At the request of USAD Mariila, Program leadership had 
changed hands repeatedly before the current Chief of Party was identified in the third 
quarter of 1998. The reviewer concluded that, although the leadership problems had 
resulted in serious implementation delays, the new management had put the Program 
back on an appropriate course and that the targets established for the activity were 
attainable. Based on this conclusion, USAXD determined to continue to provide support 
for the implementation of the blAl3S-M Program. 
A. SCOPE OF WORK 
MABS continued to show significant progress through 1999. Encouraged by 
reports of progress, USAID contracted the services of Financial Markets International, 
Inc (FM) in March 2000 to "...assess the progress of the MABS-M Program and identify 
areas where the Program might be strengthened or otherwise modified. The Scope of 
Financial Markers International, Inc. (FIM~) 2 USAID MBS - M Project 
Work (Annex A) for the evaluation requires FMI to address the following specific 
questions: 
Are the objectives of the Program realistic? 
Is the approach that is being used by the MABS-M sensible? 
Are the criteria used in selection of Participating Banks appropriate? 
Are the "'micro fmance best practices" that are being endorsed for use by the 
Participating Banks appropriate? 
Should the Program be promoting any particular minimum or maximum level of 
micro enterprise clientele as ideal for Participating Banks? 
Is MABS-M adequately informing non-Participating Banks of the results being 
obtained by participating Rural Banks? 
Are institutional strengthening efforts focused on the RBAP adequate? 
B. EVALUATION METHODOLOGY AND ACTIVITIES 
In response to the Scope of Work FMI mobilized Senior Consultants William 
Phelps and Reese Moyers to conduct the evaluation. The consultants determined that 
progress and effectiveness of the MABS-M Program could best be evaluated by 
assessing: 
The progress that has been made toward satisfying the specific objectives 
identified in the contract, including: targeted results, major tasks and, sub tasks. 
The impact that the Program is having on: Participating Banks; the micro 
entrepreneur clients of Participating Banks; and the abilities of RBRDFI/RBAP to 
develop and manage a continuing Program of assistance to RBs and CRBs 
The sustainability of Program accomplishments, including: 
o The likelihood that Participating Banks will be able to continue to provide 
quality fmancial services to micro entrepreneurs; 
o The potential for expansion of micro enterprise financial services to banks 
that are not currently participating in the Program; and, 
o The potential for an RBAP Program of ongoing assistance to RBs and 
CRBs. 
FMI consultants met in Manila with the USAIDManila Economic Growth Advisor and 
the Cognizant Technical Officer on March 27th, after which the consultants traveled to 
Davao. MABS-M meetings, interviews and fieldwork were conducted in Mindanao 
between March 28th and April 13th. An interim report was presented to USAID 
representatives at the MABS-M offices on April 7th. A presentation of findings was 
given to USAID officials in Manila on April 13, and the final draft of the evaluation was 
presented to USAIDManila management on April 19,2000. (The evaluators' schedule is 
included as Annex B) Evaluation activities included: 
A thorough review of Program related and other relevant documents (Annex C), 
including: 
Financial Markets International, Inc. (FIW) 3 USAID MA BS - M Project 
o The "Development Activity Approval Document" (DM), the doc-~~~,z,?t 
used by USAIDPhilippines as a "project paper;" 
o The Program Contract and other official documents and correspondesce; 
o WS-M Annd Plans, Quarterly Reports, Program files, 
correspondence and other Program documents; 
o The Pilot Phase Evaluation; and 
o Minutes of meetings of the MABS-M Steering Committee and 
Management Committees; 
IntemiewsiMeetings with: 
USAID Officials (Annex D); 
MABS-M staff in Davao City and Cagayan de Oro (Annex D); 
Owners, managers and Micro Finance Unit (MFU) staff of seven 
Participating Banks (Annex E); 
Owners of three non Participating Banks (Annex F); 
Interviews with twenty-six micro entrepreneur clients of Participating 
Banks (Annex G); 
RBAP and local association federation representatives (Annex D); and, 
Representatives of the Credit Union Empowerment and Strengthening 
Project (CUES), the Mindanao Economic Development Council 
(MEDCO) and the Credit Policy Improvemezt Project (CPIP) Project 
(Annex D). 
r Surveys of seven Participating Banks and twenty-six micro entrepreneur 
borrowers and savers of Participating Banks (copies of survey instruments are 
included as hexes H and I); and, 
Attendance at two MABS-M training workshcps for lMicro Finance Unit (MFU) 
staff and managers of Participating Banks. 
Having recovered from the management problems that delayed the initial stages 
of implementation, MABS-M is generally on, or ahead of, schedule toward satisfying the 
Program objectives. The Program managers have followed an aggressive strategy of 
Program strengthening that has resulted in a substantially stronger and much better 
focused Program. Important aspects of this strategy have involved activities and 
expenditures that were not anticipated in original implementation plans or budgets. The 
establishment of a sub-office in Cagayan de Oro, although not ori,@nally considered 
necessary, has proven to be a major asset to Program expansion. Considerable 
investment in the development of a comprehensive management information system was 
unanticipated, but is also considered essential to the health of the Program. Each of these 
additional initiatives was approved (in some cases, proposed) by USAID. As a result of 
these unscheduled expenditures, the current Program budget will not support the currct 
Financial Markers litternational, Inc. (FMI) 4 USAID MBS - M Prcject 
level of effort through the September 200 1 completion date. Although achievement of 
originally anticipated Program results is not seriously threatened by the budget shortfall, 
additional Program funding would facilitate considerably stronger Program impact than 
was originally expected, particularly with regard to ensuring long-term sustainability of 
financial services for micro enterprise. The matter of additional fundin, 0 has been the 
subject of correspondence and discussions between USAID and the contractor (Annex J), 
and is discussed more thoroughly in the recommendations section of this report. 
A. PROGRAM MANAGEMENT 
The current quality of MABS-M management is high. Program implementation 
has been methodical and well documented. Chemonics management has consistently 
provided strong support for the Program and has been responsive to USAID 
requirements. The MABS-M Steering Committee and the Management Committee 
appear to have provided satisfactory policy and implementation guidance. Managers and 
staff demonstrate a clear sense of program mission, and MABS-M staff is well prepared 
and highly motivated. 
AID/Manila has consistently provided MABS-M with clear policy and 
implementation guidance, and has closely monitored the Program during all its phases. 
Occasional weaknesses in formal co~~l~~lunications between AID Mission personnel and 
Pro- managers are evident, but AID guidance has been generally clear and 
adequately responsive to the needs of the Program. 
In the early stages of Program implementation, a system of q&erly work plans 
was developed through which Program managers established specific strategies for 
achieving Program objectives. The work plans, which contain 67 major tasks and 159 
individual activities through March 3 1,2000, were reviewed and approved by the 
MABS-M Steering Committee that provides overall policy guidance for Program 
implementation. (The Steering Committee includes representatives fiom the Office of 
fAe Executive Secretary, USAID, RBRDFI, RBAP and the Confederation of Mindanao 
Rural Banks). The work plans were also reviewed by the MABS-M Management 
Committee that provides guidance and support for implementation of the Program, 
including the review of MABS-M Team performance. (The Management Committee 
includes representatives of the MEDCO and USAID.) 
With the change in Program management in the third quarter of 1998, the Work 
Plan for Year 1 was adjusted to project activities for the 16 months that ended in March 
1999. The Plan includes six areas of Program emphasis: 
Institutional Stren,gthening 
Training 
SAF Initiatives 
Monitoring and Evaluation 
RBRDFI/RBAP 
Program Management 
Financial Markets International, Inc. (FIW) 5 USAID M.4 BS - M Projeci 
In order to assess compliance by Program managers with the tasks and activities 
contained in the approved quarterly work plans, FMI consultants dey~e!opecl a ma~s with 
which activities and achievements reported in the work plans were compaed with those 
that were projected for each quarter. The analysis is included in Annex K under separate 
cover. FMI consultants also validated the quarterly reports of accomplishment by 
reviewing document files for evidence of achievement and interviewing IMABS-M 
technical and management staff. 
The evaluators conclude that nearly all projected tasks and activities occurred 
either on schedule or in compliance with approved extensions of original schedules. Tne 
following is a brief review of each component of the work plans and observations 
regarding compliance. 
1. Institutional Strengtheninp incorporates Participating Bank (PB) activities, 
including, but not limited to, PI3 selection, diagnostic evaluations, organizational and 
human resource development, information systems development and installation, loan 
product development, preparation of manuals and marketing. 
Tasks: These activities are crucial to getting the PBs up and running in the micro 
enterprise lending business. Of the seventeen tasks listed in the Institutional 
Strengthening Manix, most are ultimately incorporated as final documents into 
each bank's individual "MABS Bank Binder". This volume includes, among its 
vital entries, the Participating Bank Agreement, Market Survey, Product Concept 
Paper, Business Plan, and Bank Loan Manual. The Bank Binder becomes the 
bank's basic Program reference document and is used to file trip reports and other 
important communications information. This component also includes the all￾important MIS systems diagnostic tasks for PBs. 
Observations: MABS continues to work wi& the RBRDFI to develop adequate, 
MABS compatible management idormation systems in all PBs. Successful 
iinplementation of micro finance "best practices" requires efficient information 
collection and management. 
As of March 2000, the twenty PBs were using eight different information 
systems and combinations of systems. Ten PBs work with one or more versions 
of the c'Microbanker'7 system, which is also used by as many as 50% of all RBs in 
the Philippines. During the MABS Pilot Phase, MABS managers discovered that 
the information systems (including "Microbanker") being used by Pilot Banks 
were not able to reliably track key financial indicators or adequately monitor 
portfolio performance. It was determined that the systems could not effectively 
support tte "best practices" upon which the MAl3S Program is based. MABS 
management initiated software modifications, including improvemeats to 
"Microbanker", during the Pilot Phase intended to facilitate the generation and 
management of essential management information. 
Financial M&s Internationai, Inc. (FM) 6 LEAID MABS - M Project 
Experiences with infomation system development during the lSt Rollout 
Phase further confirmed an urgent need to improve MIS functionality of all PBs. 
With the implementation of the lSt Rollout Phase, MABS management initiated 
short and long-term strategies for management information system improvement. 
The short-term strategy involves uniform modifications to "Microbanker" to 
include additional necessary reports and tagging capabilities considered essential 
to MABS programming. The modified system, known as "Microbanker 
MBXD95", is being developed through a contract with Microbanker Philippines 
Inc, the authors and owners of "Microbanker". The upgraded system will be 
installed in sixteen PBs by April 2000. The short-term strategy also includes 
assisting the four PBs that do not use the modified "Microbanker" system to 
include additional essential micro finance hctionalities to their systems. 
MABS management has also initiated development of an entirely new MIS 
that is designed to provide a comprehensive response to RB information system 
requirements, including those necessary for micro fmance. Specifications for the 
new system have been completed and a contract for its development was awarded 
in February to a Manila-based software developer. The new system is designed to 
be Mly supportive of micro finance "best practices" and is scheduled to be 
available in February 200 1 to all RBs wishing to use it. 
2. Traininq incorporates formal course work, workshops, seminars, on-the-job 
training, internships, study tours and other capacity-building activities. 
Tasks: Fifteen major tasks related to training were projected during the 
evaluation period. The Year 2 Work Plan delineates MABS Technical Staff 
Training, MABS Participating Bank Training and Mindanao Rural Bank Training 
as the specific targets of emphasis. 
Observations: One component of the training plan intended to provide micro 
enterprise training to MABS staff. However, it was reported that in reviewing the 
work plan, USAID directed that no funds be spent on training MABS staff, since 
they should already be trained professionals. 
Approximately 95% of the training efforts were directed to the pilot banks and 
rollout (1st and 2nd) banks. In late 1998, the training strategy shifted its focus to 
on-the-job coaching for PB management and staff. This was done to focus on 
creating a micro finance culture within the PBs. A MABS Regional Training 
Series was held in the third and fourth quarters of 1999 for all rural banks in 
Mindanao. The principal focus of the series was "Zero Tolerance", a concept 
popularized by MABS to ensure strict repayment of loans. It is reported that the 
series was highly praised by bank stafXs that attended. 
3. SAF Initiatives include negotiating and providing variety of incentives for PBs, 
such as procurement of equipment and salary support. 
Financial Markets International, Inc. (FIW) 7 USAID MBS - M Project 
a Tasks: The MABS Management Committee approves ex~enditures from tile SAF 
budget, which had an original contract amount of $2.0 million. This idudes 
items mentio~ed above, but also payment for workshops, selminars, studies, 
training, trips and more as inventoried in the SAF Budget Tracker (&ex L). 
Observations: The Pilot Phase evaluation recommended that a WS sub-office 
be established in Cagayan de Oro to support the expansion of the Program. This, 
along with unexpectedly extensive MIS-related work associated with the 
modification of Microbanker and the development of a new software package, 
required considerable unanticipated investment of MABS financial and human 
resources. The additional expenditures are currently being funded from the SAF 
budget, which is being used a rate that will result in budget shortages. 
4. Monitoring and Evaluation: includes M&E systems for use by PBs, the MABS-M 
Team and the RBRDFI. 
Tasks: Fourteen major tasks have been undertaken under this component during 
the evaluation period. PB Management Information Systems, PB Monitoring and 
Evaluation and MIS Staffing Issues were the main activities addressed by the 
tasks. It was reported that most of the targets were met; however, the MIS 
systems tasks remain ongoing. 
Observations: MABS is installing its M&E system in the PBs to generate 
performance data related to the micro finance unit and the bank. This includes a 
MIS Gap Analysis and reporting requirements for MABS. As discussed in 
Section 1V.A. I, above, this work is ongoing. Interim solutions are being applied 
to MIS deficiencies until a new software Program is available in February 200 1. 
5. RSRDFVRBAP includes all initiatives dealing with the development and 
stren,dening of the RBRDFI and RBAP. 
Tasks: There are seven major tasks associated with the institutional stren,@hening 
of RBRDFI/RSAP. It should be noted that this component is specifically listed as 
"Task 3" of the original contract. The principal activity initiated to meet this 
requirement was the design and presentation of a Strategic Development Plan 
(SDP) for RBAP. This work was concluded in October 1999 and included 
recommendations for implementation actions. 
Observations: The strengthening of RBAP addresses the all-important issue of 
long-tern sustainability of the Program. Key recommendations contained in the 
Strategic Development Plan included the hiring of short-term consulting experts, 
and the development of the Association's Business Plan. Although MABS 
managers have begun to advertise for a long-term consultant, full action on the 
recommendations has not been taken during the six-month period since the SDP 
was completed. 
Financial Markets International, Inc. (FM) 8 USaD IWBS - M Project 
6. Program Management: includes all activities related to overall Program 
management such as staff hiring, submitting reports, home office consultancies and 
Program evaluations. 
Tasks: This work was initiated with Program mobilization and continued with 
work plan development and submissions. These tasks, along with staffmg and 
staff changes, have been major topics for Management Committee meetings. 
Observations: As mentioned earlier, the Pilot Phase Evaluation stated that 
management problems occurred during the first two quarters of the Program. It 
was further reported that this situation was remedied with the hiring of the current 
Chief of Party in the third quarter of 1998. 
The evaluation of the MABS Pilot Phase recommended that, since much of the 
activity that was projected for the lSt Rollout Phase (six of the ten candidate 
banks) of the Program would focus on banks located within the Cagayan de Oro 
area, the MABS-M "head office" should be transferred to Cagayan de Oro. 
Although MABS management decided against moving its headquarters, it was 
decided (with DiManila approval) that a Cagayan de Oro branch office would 
be necessary. In retrospect, the decision appears to have been justified. MABS 
programming requires extensive personal contact with PBs and their staffs, and 
logistical access to several of the rollout banks from the office in Davao City 
would have been extremely difficult. The Cagayan de Oro office has enabled 
MABS staff to establish and maintain close working relationships with the PBs in 
the area, and Program progress in those PBs has been substantial. 
The Cagayan de Oro office was staffed with an expatriate manager that brought 
the skill and experience necessary to begin operations in the area in a prompt and 
efficient fashion. The presence of an expatriate manager also provided the 
Program with credibility in the Rural Bank community. The office is also staffed 
with well-trained and highly motivated Philippine personnel. 
Considerable investment has been made in the design and piloting of the "MABS 
Approach". Return on the investment depends on extensive proliferation of the 
model throughout Mindanao. In addition to contributing to the evolution of the 
MABS Program model through its application in increasingly diverse settings, the 
Cagayan de Oro branch office has facilitated program growth in an area that 
would have been inadequately inaccessible fiom the MABS Davao City 
headquarters. 
Micro Finance Policv: MABS conducted a study entitled "Micro Finance and the 
Bank Regulatory Environment" in September 1998, which contained recommendations 
for improving the policy environment to benefit loans underwritten by the MABS 
Participating Rural Banks. Subsequently, a Micro Finance Policy Component was added 
as part of the Year 2 Work Plan. The objective of the component was to work with the 
USAID-fmanced CPIP Project and the Accelerating Growth Investment and 
Financial Markets International, Inc. (FEN) 9 USAID MABS - M Project 
Liberalization with Equity (AGILE) Project to undertake a nunber of policy initiatives 
related to micro finance and rural banks. 
e Tasks: Two major tasks were listed for this component in Year 2: Develop a 
Micro Finance Policy Agenda and Carry Out Policy Initiatives. 
Observations: It was reported that the above tasks are ongoing. It should be noted 
that MABS contract includes no specific policy related tasks and anticipates no 
specific policy related results. The contract does, however, indicate that the 
contractor will become "familiar wirh.. .the Micro Finance Policy Improvement 
Program" (now known as CPIP). However, in consultation with USAID the 
Micro Finance Policy component in Year 2 has been de-emphasized and it was 
deleted as a component in the Year 3 Work Plan. 
B. PROGRESS TOWARD SATISFYING SPECIFICALLY TARGETED RESULTS 
The Program has made substantial progress toward satisfying all of the results that 
are specifically targeted in the MABS-M contract. By the scheduled end of the Program 
in September 2001, it is probable that all targets will have been satisfied or surpassed. 
USAID Program managers have informed MABS-M management that, based on the 
progress that has been shown, USAID expects the Program to reach more Participating 
Banks and branches, more borrowers and more depositors than were originally 
anticipated (Annex J). The contractor (Chemonics) has requested thar USAID provide 
additional funding for the Program. The additional funding would ofrset the 
unanticipated expenditures associated with the Cagayan office and MIS development, 
and enable the Program to operate until September 2001 at its current level of effort. 
MABS management has assured USAID that the additional targets could be satisfied or 
surpassed with the additional funding. 
In retrospect, the original targets were conservative. However, program designers 
could not have anticipated the success that TVIABS-M has had with its efforts to recruit 
Participating Bik?ks and activate micro finance units in the banks. Much of the additional 
growth that is projected by MABS-M management is based on opening additiond 
branches of currently Participating Banks. By programming expansion through 
additional branches of currently participating banks, the Program is leveraging its 
development base, thereby achieving geographic and numerical expansion of micro 
lending with lower levels of effort. 
The MABS-M Pilot Phase Evaluation concluded that the targets that had been set 
for the Program required no modification. The targets were considered by the evaluator 
to be "attainable"; but there was no clear indication at the time that the Program would be 
able to achieve more than was originally anticipated. Given the experiences of the most 
recent months of Program implementation, AID Program managers are negotiating new, 
more ambitious MABS targets. 
Fimcial Markts International, Inc. (F.?N) 10 USAID MABS - M -project 
1. Bank Participation Targets 
The target of providing assistance to at least twenty RBs/CRBs was reached in 
March 2000, 15 months ahead of schedule. In addition to the four pilot banks and ten 
"first rollout banks", six "second rollout banks" have been receiving training and 
technical assistance since July 1999 and are scheduled to begin lending by June 2000. 
Based on progress to date and current funding levels, MABS management 
estimates that, in addition to the 20 Participating Banks the Program will generate as 
many as 12 additional micro lending units by September 2001. This will be 
accomplished through expansion into branches of the 20 Participating Banks. Table 1 
displays the timing of bank participation to date and projections for the participation of 
additional bank branches. 
TABLE 1 
MABS-M PARTICIPATING BANK AND BRANCH START UP SCHEDULE 
MABS managers anticipate that additional USAID hding to maintain the 
Program at full current operational capacity through September 2001 could increase the 
total number of Participating Banks and bank branches to as many as sixty. 
2. New Micro Enterprise Borrower Targets 
Current rates of portfolio growth indicate that the target of at least 500 
outstanding loans to the micro enterprise sector per bank is achievable. Six "second 
Financial Mmkets International, Inc. (FMI) USAID A44 BS - M Project 
rollout bdls7' have been receiving training and rcchnical assisrance since July 1999 and 
are scheduled to begin lending by June 2000. 
The Program is required to have generated new micro loan portfolios in each of 
the Panicipating Banks of at least 500 borrowers. The total number of new micro 
borrowers is expected to total at least 8,000 by September 2001. Progress to date 
indicates that the Program is likely to exceed the required targets. 
TABLE 2 
MASS-M LOAN PORTFOLlO GROWTH 
Table 2 shows that as of March 2000 the 14 Participating Banks that had initiated 
MABS micro lending operations (the six second rollout banks will begin lending by June 
2000) had generated portfolios of 2,829 micro borrowers. Based on experience to date 
and the business plans of each of the banks, MABS managers Program a total of 10,000 
new borrowers at the current funding levels. With sufficient additional funding to 
maintain the Program at its current level of effort, MABS managers anticipate that micro 
loan portfolios in all Participating Banks and branches will total as many as 21,000. 
3. New Micro Enterprise Depositor Tarnets 
The Program target of about 1,000 new depositors per bank and 15,000 new 
depositors among all banks and branches is achievable and likely to be surpassed. 
Financial Markets International, Inc. (FMI) 12 USAID MABS - M Project 
A total of 11,548 new depositors were recorded as of March 3 1,2000, and 23,140 
new depositors are projected for September 2001 at current Program funding levels 
(Table 3). Although MABS management has not made specific projections for the 
number of new depositors that could be achieved if additional funding is available 
through September 2001, it is reasonable to expect that significant increases would result. 
TABLE 3 
MABS-M NEW DEPOSITORS 
(CUMULATIVE) 
4. Integration of Micro Finance in Participating Banks 
The Program contract stipulates that by September 200 1 at least one half of the 
MABS Participating Banks will have incorporated micro finance as a "significant part of 
their portfolios and will have taken steps required to properly and profitably service the 
market." Although, achievement of this target is not as quantifiably demonstrable as 
other targets, it is clear from interviews with bankers and review of bank business plans 
and files that the target has been attained. Pilot and first rollout banks are increasing their 
Financial Markets International, Inc. (FM) 13 LEAID MA BS - M Project 
micro lending. Although the micro service growth strategies of some of tke bmkz uz 
more aggressive than others, all of the 7 surveyed banks expect micro finmcial sscrkccs 
to eventually represent at least 30% of their business. Two of the surveyed b&.s pim to 
implement straregies involving nearly exclusive focus on the micro enreqrise mdcet. 
The enthusiasm for micro finance that is conveyed by the surveyed banks is based, in 
every case, on careful market analysis and serious projections for profirabie operations. 
C. PROGRESS TOWARD SATISFYING MAJOR TASKS 
1. Maior Task #l 
MABS-M was expected to enter into formal agreement with at least 20 Participating 
Banks through which the obligations and expectations of each party are clearly 
established. The agreements are expected to represent solid commitment by the 
Participating Banks and the MABS-M Program to the development of profitable financial 
services for micro entrepreneurs. 
This task was completed by late 1999. Formal agreements have been developed 
and signed with each of the 20 currently Participating Banks. The agreements clearly 
identify the obligations and expectations of both parties. Each agreement has been 
reviewed and approved by both the MABS Management Committee and by USAID. In 
addition to establishing formal, contractual relationships between the Program and the 
Participating Banks, the agreements set the tone for the practical, day-to-day relationships 
between MASS personnel and bank managers and staff that have faciIitated the progress 
that the Program has realized. The agreements are included in the MABS Bank Binders, 
dong with related market studies, business plans and other related Progrm documents. 
Each agreement is well-documented and available for review in the MABS-M offices in 
Davao City. 
Interviews with seven Participating Banks reveal that bank owners and mznzgers 
clearly understand and fully subscribe to the terms of their agreements with the Program. 
The experience that MABS has accumulated through oegotiating and working 
together with the 20 currently Participating Banks provides a solid foundation for 
developing agreements with fu~e additional Participating Banks and branches. 
2. Major Task #2 
The contractor will design and implement training, technical assistance and other 
Progrms intended to develop the capabilities of Participating Banks to profitably service 
the micro enterprise market. 
MABS-M has made substantiated progress toward satisfying this task. MABS 
professionals have worked closely with the management and technical staff of each 
Financial Mar!cets International, Im. (FM) 14 USAID MABS - M Prqkt 
participating bank to develop practical work plans for conducting market studies, 
developing and testing individual financial products and other tasks for achieving 
profitable MFU operations. The FMI survey of seven Participating Banks and review of 
progress reports confirm that the Participating Banks are conscientiously implementing 
their business plans. 
Details of MABS technical assistance and training activities are provided earlier 
in Section V1.A of this report. The activities are comprehensive, well organized and 
effectively delivered. They include: activities designed to develop and strenagthen micro 
finance units within each bank, formal training, workshops, seminars, on-the-job 
coaching, study tours, internships and other activities. A comprehensive range of subject 
matter is included in MABS technical assistance and training. Particular emphasis is 
given to various technical aspects of micro lending and the implementation of "best 
practices methodologies". 
The development of "The MABS Approach" probably best demonstrates the 
effectiveness of MABS technical assistance and training. Based on the experience gained 
from approximately 12 months of Program implementation through its work plans, 
MABS began preparing its "Training and Technical Assistance Manual". This two￾volume manual, completed in the fourth quarter of 1999, is known as the "MABS 
Approach". It contains the major tasks and activities carried out in the previous work 
plans and synthesizes them into step-by-step procedures to be followed by MABS staff 
fiom the selection of a participating bank through implementation of all Program 
activities. Sections of the "MABS Approach" manual include: 
Selecting the Participating Banks 
Orienting the Management of Participating Banks 
Preparing the Participating Bank Agreement 
Organizing and Orienting the Micro fmance Unit 
Training the MFU and Bank 
Preparing the Business Plan 
Preparing the MF Product Manual 
Marketing the MI? Products 
Supervising and Monitoring MF Operations 
Expansion Phase 
The manual is continually updated. For example, the Monitoring and Expansion 
Phase Sections are still works-in-progress. The objective is to have an effective, 
standardized process that can be used in Mindanao and elsewhere (the Visayas and 
Luzon) to assist in rapid Program mobilization and implementation. 
The criteria and process used for selection of banks for participation in the 
Program have improved with implementation. The selection of PBs for the MABS Pilot 
Phase involved assessment of institutional well being, experience with small and micro 
lending, and market access. However, the level of interest among potential participating 
banks was considerably less during the Pilot Phase than during the subsequent rollout 
Financial Markets International, Inc. (FM) 15 USAID MABS - M Project 
phases; and willingness to participate became an important factor during the selection 
process. Current MABS managenent acknowledges that the selection of Pilot Phase PBs 
was considerable "less scientific" than the process that has been used for rollout phase 
selection. Current participating bank selection includes assessment of basic insdmtional 
health using standard financial and credit portfolio related criteria; orientation to, and 
experience with, the micro enterprise marketplace; and micro credit growth potential, 
including plans and potential for expansion through additional bank branch development. 
The current criteria for selecting banks for MABS-M participation are adequate 
and suitable for continued Program expansion. It is particularly important that continued 
emphasis be placed on micro credit portfolio growth potential as a major factor in the 
selection process. 
Discussions with Participating Banks, MABS Staff and file reviews indicate that 
implementation of technical assistance, training and other activities has proceeded 
efficiently and on schedule. Ongoing technical assistance is helping to maintain a "micro 
finance culture" within the banks that have already completed their initial technical 
assistance and training. 
Bank survey results indicate complete satisfaction among bank owners and staff 
with lMABS technical assistance and training. They credit training in the MABS 
methodology with the health of their new micro enterprise loan portfolios. All 
Participating Banks are experiencing virtually no delinquency with their MABS lending. 
The "WS Approach" and "best practices methodologies" that are being 
promoted by the Program have been fuily adopted by Participating Banks. Interviews 
with bankers showed no indication of dissention or dissatisfaction. Several of the 
surveyed bank managers are incorporating the techniques that tley have learned through 
MABS training and technical assistance in their non-micro lending operations. 
The balance that MABS has established between on-site technical assistance and 
off-site training appears to be appropriate and effective. Although the MFU sta3 
members that were interviewed expressed strong preference for on-site, one-on-one 
attention from the MABS Team, no complaints or suggestions for modification of the 
balance were registered. 
Budget support to Participating Banks has proven useful as a means of 
encouraging banks to experiment with the Program. Several of the Partici~ating Banks 
have had negative experiences in the past with lending to micro entrepreneurs, and most 
have long histories of making only well-secured loans. Prior to the experience that the 
banks are having with the h/LABS methodology, unsecured lending, particularly to micro 
entrepreneurs, was perceived as being unprofitable and prohibitively risky. 
3. Major Task ;if3 
Financial Markers International, Inc. (FMI) 16 
MABS-M is expected to develop the capabilities of RBRDFI/RBAP to mount its own 
Program of assistance to RBs/CRBs to profitably provide services to micro enterprises. 
Progress toward satisfying Major Task #3 has been satisfactory. Priority emphasis of 
the MABS Program to date has been placed on working with the banks to develop and 
implement effective and profitable micro fmance services. MABS and USAID managers 
have maintained RBAP institutional development efforts in a planning mode, pending the 
development of a demonstrably successful micro lending program model. 
The Rural Bankers Association of the Philippines (RBAP) is a national 
organization formed in 1957, which today serves as the headquarters organization for a 
rural banking system that includes 842 banks and 1,120 branch operations. Within the 
system, Rd Banks are organized regionally into eight confederations and, at the 
provincial level, into 39 federations. 
The Rural Bankers Research and Development Foundation (RBRDFI) was 
formed by RBAP in 1986 to provide members with increased service, including 
establishing scholarships, conducting research, training and data colIection. The major 
RBRDFI revenue generating activity in recent years has been the installation of 
"Microbanker" software, which is now used in approximately 20% of rural banks. The 
MABS-M Program is headquartered in the RBRDFI office in Davao. The Foundation's 
Executive Director is the principal interface with MABS Staff. 
Initial MABS efforts with RBAP institutional development occurred in April 
1999 when a MABS-contracted consultant conducted an institutional assessment of the 
Association. The consultant held several meetings in May 1999 with RBAP Directors 
during which both RBAP and RBRDFI concluded that the RBAP system needed 
transformation. The consultant then worked with RBAP and RBRDFI to develop the first 
draft of a Strategic Development Program (SDP), which was presented at the RBAP 
Annual General Meeting and Convention in June. A Working Committee was organized 
after the convention to maintain momentum for the initiative. 
The SDP contains numerous recommendations for the restructuring the RBAP, 
the most important of which are: 
Restructure the RBAP around a number of core technical Programs. The effect 
would be to bring RBAP and RBRDFI together as one operational unit; 
Place operational authority for technical Programs under the auspices of the 
RBRDFI. In effect RBRDFI would operate as an in-house consulting arm; 
Merge the stafFof the two organizations and consolidate financial resources; 
Develop revenue generation schemes; and 
Develop, with MABS support, new rural banking software. 
The MABS consultant assisted with preparation of the SDP for presentation to the 
membership at a MAP Symposium in mid-September. It was presented as a "Results 
Framework and Implementation Guide7'which incorporates the steps the RBAP would 
Financial Mmkets International, Inc. (FMI) 17 USAID MABS - M Project 
take to institutionalize its operational planning cycle. Following the Symposium, the 
regional Vice Presidents all conveyed the commitment of their federations to the plan. 
Initial technical work requirements identified by the consultant included: 
e An "Apex Bank" Feasibility Study; 
Use of GTZ financed technical assistance to build an RBAP technical 
consulting capacity; 
Development of an Academy of Banking in the Countryside (ABC) 
Sustainabiliry Strategy; and, 
Development of a "Micro Finance Technology Transfer" Series. 
In late September the President of RBAP and the Executive Director of RBRDFI 
agreed to a joint institutional restructuring plan for RBAP and a guideline for 
implementation. The continuing implementation process required MABS support with 
hiring and salary subsidies for a Program Development Advisor (6 months) and a 
Banking Systems Advisor (4 months). That level of effort was subsequently changed to a 
single program Development Advisor for 18 month, with MABS agreeing to provide full 
salary support for the Advisor's initial 6 months. MABS management is currently 
advertising for candidates for the position, and expects the Advisor to be on board in 
June. 
MABS and RBAP management fully understand that the long-term sustainability 
of the MABS Program depends on the institutional development of RBAP. However, 
both agree that more time was needed to perfect the "MABS Approach" and to 
demonstrate the success of the Program before engaging RBAP management and 
membership in implementing the SDP. 
D. PROGRESS TOWARD SATISFYING RELATED SUBTASKS 
USAID anticipated that MABS-M wodd be implemented in coordination with 
several other activities that are financed by, or otherwise of particular interest to, USAID 
development activities. Accordingly, the contractor is obliged to accomplish several 
"related subtasks" during the course of MABS-M inplementation. The following is an 
assessment of MABS-M progress toward satisfying each of the subtasks. 
Coordination With Other USAID Su~ported Prozrammino, 
Extensive review of MABS-M files, discussions with MAE3S-M staff and interviews 
with managers of other USAID supported activities reveal that reasonable effort has been 
made to coordinate MABS-M implementation with other specific USAID supported 
micro finance related activities. 
The MABS-M Chief of Party has held several meetings with the Executive 
Director of the CUES Project of the World Council of Credit Unions to discuss 
areas of common interesr: and concern. CUES management has indicated ul 
Financial Markets International, Inc. (FMI) 18 USAID MABS - M Project 
interest in further addressing issues such as the establishment of a credit bureau 
and the legal/readatory environment that is needed for healthy micro enterprise 
development. 
Several discussions have taken place between the managers of MABS-M and 
USAIDys CPIP Project. CPIP has received input fiom MABS-M management 
regarding efforts to establish a micro finance-friendly policy agenda to be 
formally presented to the Central Bank. CPIP managers indicate interest in using 
documentation of MABS-M experiences as a demonstration to Central Bank and 
Philippine legislators of an effective alternative to subsidized credit Programming. 
MABS-M management has investigated the potential of utilizing the USAID 
Global Bureau Loan Guarantee Program for MABS-M implementation. It has 
been determined, however, that the Program is not an appropriate intervention for 
MABS micro services. 
Through its Micro enterprise Policy Component, MABS engaged the cooperation 
of the AGILE Project to work with the Philippine Central Bank on several issues 
including, reduction of corruption in the banking sector. MABS-M management 
also works on an ongoing basis with the Growth with Equity for Mindanao 
(GEM) Program to ensure Programming compatibility. 
2. Facilitation of RBICRl3 Affiliations 
MABS-M was expected to identify and facilitate potential affiliations among 
RBs/CRBs that would better enable the banks to more effectively and profitably serve the 
micro enterprise market. The possible establishment of a "mother bank" is specifically 
mentioned in the MABS-M contract. 
Although progress toward development of the anticipated "affiliatioix" has been 
slow, MABS-M management has invested considerable effort to encourage and facilitate 
coordinated inter-RBICRl3 activity. 
A MABS-M contracted consultant developed the RBAP Strategic Development 
Plan (described earlier in this report) around which RBAP is expected to improve 
its effectiveness. The planning process included a symposium that brought 
together a majority of Mindanao RBs/CRBs in an effort to promote the servicing 
of the micro enterprise market. 
MABS-M management participated in a number of meetings concerning the 
possibility of creating an APEX bank for the rural banking sector. It appears that 
MABS-M management was influential in the RBAP decision to not pursue 
development of the Program. 
In March 2000 the MABS-M Chief of Party spoke to the Mindanao Confederation 
of Rural Bankers regarding MABS-M progress and micro finance opportunities. 
The presentation was the third time that MABS-M management was invited to 
address the confederation. Such public relations work has proven very helpful in 
exposing the Program to a broader base of rural banks. 
MABS has conducted seven "MABS Approach" workshops and seminars for all 
Mindanao banks. The events have been well attended, and feedback fiom both 
Financial Markets International, Inc. (FMI) 19 USAID MABS - M Project 
MABS Participating Banks and non-Participating Banks indicates tiat the 
attendees are becoming better informed and more enthusiastic regzrding micro 
finance activities. 
Financial Markets hternational, Inc, (FiW) 20 USAID MA BS - M Project 
3. Advice and Assistance to NGOs 
The MABS-M contract anticipated that the Program would provide advice and 
assistance to NGOs that are providing micro finance services in Mindanao and are 
interested in developing banking operations. The contract indicates that the anticipated 
assistance would be provided in consultation with USAID. 
One NGO, the Roxas Foundation, was identified by USAID for MABS 
assistance. MABS-M and USAID staff visited the Foundation on July 23, 1999 and 
discussed the operations of Hublag, the development finance division of the Foundation. 
As a result, MABS made recommendations on the transformation of Hublag into a rural 
bank. It should be noted that the MABS COP expressed interest in providing similar 
assistance to other NGOs. 
4. Data Collection and Reuorting 
MABS provides quarterly reports to USAID detailing Program progress and 
peri?ormance for the prior tmee months period. It also meets with the Steering Committee 
quarterly and the Management Committee monthly to present an update of Program 
progress. These reports/meetings include all required information, with the exception of 
gender specific data. MABS is currently assisting PBs to modify and augment their 
infomation systems to provide additional MABS required data, including borrower 
segregation by gender. It is expected that all PBs will be able to provide all required 
borrower related data by June 2000. More extensive information system development is 
in progress that is expected to accormnodate much more sophisticated data collection and 
analysis by February 200 1. 
E. MABS-M IMPACT ON PARTICIPATING BPdKS AND POTENTIAL FOR 
MICRO ENTERPRISE SERVICE SUSTAINABILITY 
There is ample evidence that MABS-M has had significant impact on all twenty 
Participating Banks. As indicated earlier in Section IV.B, Progress Toward Satisfying 
Specifically Targeted Results, each of the pilot and "first rollout banks" has developed 
rapidly growing micro loan portfolios and micro savings bases. Tne seven-bank survey 
that was conducted by FMI consultants indicates that bank managers are enthusiastically 
integrating micro business into their business plans and Programs. Several surveyed 
bank managers are incorporating "MABS Approach" methodology into their general 
bank lending operations. Table 4 displays the results of an analysis of the participating 
bank survey. 
Between March 29 and April 5,2000, FMI consultants Moyers and Phelps 
interviewed the owners, managers and micro-finance unit staff of seven of the twenty 
MABS-M Participating Banks (see Annex E for a list of interviewees). The following is 
an overview of interviewee responses to questions about the MAl3S-M Program. 
TABLE 4 
MABS-M 
PL 
QUESTION 
1) What do you think about 
MABS-M? 
2) What is the image of MABS-IM in the 
rural banking industry? 
3) What are your expectations of the 
Program? Are they being met? 
4) Do you think that providing micro 
enterprise financial services is profitable 
to your bank? 
5) Do you plan to expand micro 
enterprise services in the future? 
6) What technical assistance and other 
services are being provided by MABS ? 
Are they appropriate for your bank? If 
nos why? 
7) Is the balance between MABS on-site 
training and off-site training appropriate? 
8) Are the subjecWtoplcs included in 
MABS technical assistance and training 
appropriate? If no& how would change 
them? 
TlClPATlNG BANK SURVEY RE 
CONSENSUS 
- MABS is appropriate technology for 
financial services in the philippi& 
micro-enterprise culture. 
-Demonstrates profitability of micro 
lending. 
- MABS experience has overcome 
preexisting anti micro prejudice. 
- The "MABS Approach" is applicable to 
other loan products. 
- All respondents report 100% repaymen1 . - experience with h&~. 
- MABS is widely known; most banks 
are interested. 
- Although initially skeptical, most rurai 
banks are interested; many are copying .. - 
aspects of MABS. 
- Initial expectations were guarded; staffs 
and directors were skeptical. 
- Following initial experiences, staff and 
directors expect micro services to expand 
rapidly. 
- Banks are generally convinced of 
profitability. 
- Pilot banks are seeing indications of 
profitability following initial slow 
period. 
- Is rollout banks are showing clear signs 
of profitability. 
- 2"" rollout banks are optimistic, based 
on experiences of other banks and their 
own business plans 
- Singie branch banks anticipate 
aggr&ive growth of micro-&terprise 
savings and loan portfolio. 
- Most multi branch banks expect to 
introduce micro financial services to 
more than one of their branches. 
- Four multi branch banks plan to 
institute MABS in all branches. 
- The entire "MABS Approach" package 
of training and T.A. is bein! applied. 
Minor variations in emphasrs are evident 
- Manaeement and MFU staff are d 
generally satisfied with the package. 
-Yes, the balance is generally - cons~dered 
to be appropriate. 
- On-site "coaching" is considered to be 
particularly useful. 
- Generally satisfacto~y 
-No suggestions for change are offered. 
- Particular appreciation expressed for 
training with cash flow and client 
capacity to pay analysis. 
Financial Markets International, Inc. (FMI) 21 
ILTS 
EXCEPTIONS 
At least two respondents expressed 
concern that their current (100% 
repayment) experience with MABS may 
be a passing phenomenon. They 
reference past experiences with the 
borrowin$ culture of heir micro 
clientele, and are anticipating possible 
growing problems with delinquency 
"once the novelty of 'zero tolerance' 
wears off, after one or two years of 
experience. 
One bank manager indicated that he 
"hopes" that MABS will provide funds 
for micro lending. 
Based on pre-MABS negative 
experiences, Rural Bank of Panabo is not 
currently lending to micro venders. 
Management will consider market 
reenw after MABS ixials in micro￾productive and micro-service sectors. 
Century Rural Bank (Babak) does not 
anticipate needing MABS assistance with 
their information systems. 
- Several respondents indicate 
nervousness about "going on their ownn 
after the conclusion of the MABS 
F'r0,gam. 
- Severai MFU staffers request more 
"one-on-one coaching" 
USAID MABS - M Project 
9) What percentage of your toral 
portfolio of borrowers and savers is 
micro-entrepreneurs? What is your 
Program's percentage of micro￾enterprise clients as part of your total 
clientele for the future? 
10) What 1s your current averqe micro 
loan size? What is your Program's micro 
loan size in the fkture? 
1 1) What commodity andlor staff support 
are you receiving from MABS? What 
changes you suggest? 
12) Can your bank compete effecuveiy 
with informal lenders? 
13) Does your bank participate in the 
PCFC Program? If so, how does this 
Prow compare/compete with the 
MABS Program? 
14) Are ?here any signlricant legal or 
regulatory limitations that may affect the 
:xpansion of your micro lending and 
saving services? What are they? 
15) What are your eligi~ility crireria for 
micro lending? 
16) How do you decide ~f you want to 
give someone a micro loan? 
-'.Zero Tolerance" tninlng is wdely 
accepted and appreciated. 
- Pilot and lU rollout banu have hlABS 
portfolios ranging from less than I% to 
20% of their current loan portfolio. 
- Expectations for growth of micro 
services range from 4% of total bank 
loan portfolio to 100%. 
- All bada anticipate significant soh. 
- Loan size is based on analysis of a 
client's cash ff ow and ability to repay. 
-Average loan size varies widely among 
Participating Banks; from 1,000 pesos 
($25 at current exchange rate) to 10,000 
pesos ($250). 
- Average loan sizes are expected to 
increase as Pro,orams mature. Loan 
averages range from 3,000 pesos to 
30,000 pesos. 
- Each participating Bank has received 
the standard MABS staff salary subsidy, 
one or more computers and software, and 
one or two motorcycles. 
- Most respondents acknowledge that the 
assistance Program has satisfied their 
needs. 
-All respondents are confident that they 
can compete effectively with competing 
micro lenders. 
- Most respondents feel that they are able 
to price their micro loan products 
favorably. 
- Experience with, and opinions 
regarding, PCFC vary widely. 
- One respondent has discontinued PCFC 
because of dissatisfaction with the 
"Grameen Model". 
- At least four respondents have had 
positive experiences with PCFC and use, 
or plan to use, PCFC to fund MABS 
portfolio. 
- Most respondents understand and prefer 
the savings aspect of MABS. - Banks using group lending models are 
particularly comfortable with PCFC￾MABS coordination. 
- Central Bank resmcrions on new 
branch expansions conflict with growth 
aspirations of several respondents. 
-No respondents express major -concern 
for potential limitations on unsecured 
lending. 
- Lending cnteria are essentially the 
same among interviewed banks. 
Eligibility criteria are compatible with 
the "MABS Approach" 
- Eligibility criteria generally include 
credit worthiness, residency, "insurable" 
age, appropriate business experience and 
access to "co-makers"(1oan guarantors). 
-The "WS Approach" has introduced 
radically different procedures and 
standards for client selection. Most 
banks with pre-IWS micro lending 
experience have used standard collateral 
based lending practices. 
- In addition to satisfying eligibility 
criteria MABS clients underio thomunh 
Financial Markets Inrerna~ional, Inc. (FlW) 22 
-rill msponaents aave naa some 
experience with micro lending. Salary￾based mic:o lending IS very common. 
representing up to 85% of one 
respondent's portfolio. 
- Projections of portfolio growth have 
been developed for each participating 
bank. 
- One bank manager wouid prefer bener 
quality computers. 
- Several bank managers would like more 
motorcycles. 
Althougn most respondents express thex 
optimism cautiously, one manager of a 
2* rollout bank indicated that they pian 
to "clobber the informal lenders" in their 
marketplace. 
One respondent (Green Bank) is 
optimistic that their request to open two 
new branches will be approved soon. 
- Banks that specialize in group lending 
apply eligibility criteria associated with 
that model. 
-Banks that participate with PCFC apply 
the required "means test". However, 
several banks are "ignoring" many PCFC 
eligibiiity standards. 
USAID MBS - M Project 
introduced by MABS that you are 
currently applying? 
18) Do you think that the experiences of 
your bank will persuade non￾participating Banks to initiate micro 
lending and savings services? 
19) Should the Rural Bankers 
Association continue to support micro 
enterprise at the conclusion of the MABS 
Program? What types of services should 
RBAP provide? 
you thiik that other banks would be 
willing to pay for these on a cost￾recovery basis? 
credit investigat~on and repayment . . capacity analysis. 
-All respondents are applylng all MABS 
practices to h4ABS lending. 
- Most respondents are applying MABS 
introduced techniques to some or all of 
their other loan products. 
- The "MABS Approach" appears to 
have been universally accepted. 
- Most respondents have recommended 
the Program to other bankers. 
- Experience to date with MABS has 
resulted in general recognition that micro 
financial services are desirable markets 
for rural banks. 
- Most respondents indicate that non￾participating rural banks are interested in 
participating, and hope that the Program 
will be expanded beyond its current 
plans. 
- Most respondents feel that RBAP 
should offer ongoing support for MABS 
Programming. 
- Many respondents are not confident 
that RBAP has the capacity andlor the 
orientation to absorb a MABS technical 
assistance role. 
- Most respondents indicate that RBAP 
would require extensive assistance before 
it could assume WS successor 
responsibilities. 
- All bur one respondent feels that the 
MABS technical assistance package 
would be affordable to most banks. 
- Most managers are convinced that 
profits generated through micro services 
would easily absorb the training and T.A. 
costs. 
Several respondents are not making full 
use of MABS information system 
assistance. Some are comfortable with 
their own sysxems and are working with 
MABS technicians to ensure 
compatibility with reporting 
requirements. Others are unsure of the 
future of their manasement information 
systems are looking to MABS for 
guidance. 
One respondenr (Century Rural Bank) 
indicated that they are not interested in 
sharing the MABS experience with 
potential competitors. However, they 
would encourage MABS Program 
development with banks outside of their 
markets. 
-One respondent assumes that the cost of 
the Program would be prohibitively high 
to be absorbed by the average rural bank. 
- Several respondents indicated that, 
although they are confident that banks 
could afford the cost of MABS training, 
they have no idea what the cost would 
be. 
Assuming that profitable experiences with micro enterprise lending will motivate 
banks to continue to develop and expand their micro enterprise portfolios, current 
indications are that the potential for sustainability of the MABS-M Program in the 
Participating Banks is strong. 
Analysis of the micro finance activity performance reports of the pilot and "first 
rollout banks" demonstrates that productivity and efficiency ratios are improving. 
The "first rollout banks" are showing particularly rapid improvements in 
operational efficiency. Although MABS-M micro lending is still in its early 
stages, and the loan portfolios have not grown to optimal proportions, the 
indications of efficiency improvement are encouraging. 
As of March 2000 MABS-M micro lending in all of the Participating Banks has 
produced virtually no delinquency. Managers of surveyed banks express extreme 
satisfaction with MABS-M portfolio performance. 
Table 5 analysis of the profitability ratios of MABS-M micro lending versus 
overall lending in the branches of participating pilot and "first rollout banks" 
reveals that micro lending is considerably more profitable. MABS-M micro 
Financial Markets International, Inc. (FM) 23 USAID MABS - M Project 
lending ,oenerates interest rate spreads that are three to four times gieser than he 
average annualized spread on the banks' overall portfolios. IvLG3S-hl lorn 
portfolios produce yields that average between 3.5 and over four times the 
average yield of the banks' overall portfolios. Although WS->I micro lending 
is still in its early stages (particularly in the "first rollout banks") ad hLAES-M 
micro lending generally represents a smaIl fraction of all bank branch lending, - these early indications of the relative profitability of micro lending are generatkg 
considerable interest by bank owners and staff. 
PROFITABILITY RATIOS: MFU LOAN PORTFOLIO VS. OVERALL BANK 
PORTFOLIO 
All twenty Participating Ban.?? are projecting significant profitability for their 
micro finance activity. FMI consultants analyzed the portfolio growth and 
profitability projections contained in participating bank business plans to ensure 
that the projections are consistent with historical patterns. Although the 
projections of most banks are optimistic, they are not inconsistent with 
demonstrated growth trends. 
Table 6 displays an analysis of the dates when each of the Participating Sanks 
expects to reach the point of operational breakeven (the point at which income £iom 
micro finance services is equal to direct expenses plus indirect expenses). The table also 
displays key characteristics of the micro finance portfolio of each bank when it reaches 
operational breakeven. (For example: Enterprise Bank is projected to reach operational 
breakeven in June 2000, after four quarters of MABS-M micro lending. At that point the 
bank will have 570 outstan-ding micro loans totaling 1,320,000 pesos, and the average 
Fincncial MaAets Internctional, Inc. (F1M.r) 24 USAID MBS - M Project 
outstanding loan size is expected to be 4,000 pesos.) The analysis should not be used to 
compare the banks to one another: each bank has a different strategy for micro finance 
service development. Some banks program operations in one branch; others anticipate 
developing micro fmance operations several branches. Costs and e6ciency levels also 
vary widely among the banks. The analysis indicates that the banks expect to break even 
following between one quarter and seven quarters of MABS-M micro finance activity. 
The average period of operation projected before a bank reaches breakeven is 4.4 quarters 
of MABS-M operation. 
TABLE 6 
OPERATIONAL BREAKEVEN POINT 
PROJECTED PROFITABILITY* 
* Average Loan Portfolio has been rounded up to the nearest 10,000 pesos. 
Additional analysis of profitability projections indicate that most of the 
Participating Banks will recover 100% of the cost of development of their micro finance 
operations (including MABS-M budget support and equipment grants) within two 
quarters of reaching operational breakeven. 
F. MABS-M IMPACT ON BORROWERS 
Evidence indicates that the MABS-M Program is reaching growing numbers of 
the population on which the Program is intended to impact. On March 3 1,2000, MABS￾M Participating Banks had a total MABS-M micro loan portfolio of 2,829, and micro 
savers numbered 1 1,548. The MABS-M management information system that is being 
installed in coordination with the Participating Banks is not designed to produce data 
Financial Markets International, Inc. (FM) 25 USAID MABS - M Project 
descriptive of the banks' clientele. However, borrower eligibility criteria, market 
analysis, bank business pIans and other factors generally direct hMS-b1 micro 
enterprise services to small, individually-owned business that employ fewer than ten 
people. Average loan sizes vary by bank, but on average bfABS-M loans tend to range 
between 3,000 and 15,000 pesos ($75 to $275). 
Table 8 displays an analysis of a survey that was conducted by FM consultants of 
26 MABS-lvf clients of seven Participating Banks. Most of the surveyed clients were 
merchants operating in public market stalls. Although 11 of the 26 surveyed clients are 
male, the staffs of Participating Banks estimate that more than 90% of their micro 
borrowers are female. Most of the surveyed clients indicate that they have borrowed 
from the MABS-M Participating Banks as an alternative to moneylenders who charge 
interest rates up to 20% per month. All of the borrowers report that the lower cost of 
borrowing fkom the Program has enabled them to increase inventories, improve 
infrastructure, acquire new tools and otherwise improve the quality of their businesses. 
In addition to the compulsory savings that are a requirement of borrowing under the 
Program, several of the surveyed micro entrepreneurs also save voluntarily. The daily 
collection visits by bank account officers make it easy for them to save daily. All of the 
survey respondents expressed satisfaction with both the savings and credit aspects of the 
Program. 
Between March 29 and April 5,2000 FMI consultants interviewed 26 micro￾entrepreneur clients of six LWS-M Participating Banks (five first rollout banks and one 
pilot bank). The clients included first, second and third-time borrowers of MABS 
engineered financial services (see Annex G for a list of interviewees). 
QUESTION EXCEPTIONS 
business? 
2. How many people (including 
unpaid family members) work for 
1) Do you operate more than one 1 25% of intervlewed ciients operate ( 
CONSENSUS 
two businesses. I 1 
Clients interviewed average 3.5 
employees, including unpaid family 
you? 
3. What are your gross saies per 
business? (Indicate if daily, weekly 
members. I 
C!ients interviewed have average 
gross sales of 3,300 pesos per day per 
or monthly.) I business. I 
Financial Markers Internaiional, Inc. (FMI) 26 UX4 ID MA BS - M Project 
4. How many times have you 
borrowed from the Program? 
5. What are the terns and conditions 
of your current loan? 
- Interest rate 
- Loan amount 
- Repaymenr period 
- 80% interviewed clients of 1" 
rollout banks are 2"* time borrowers. 
- Two clients of the Pilot bank visited 
had borrowed 6 times; one had 
borrowed once. I - Interest rates vary between 2% and Rural Ed of Montevista clients are 
J 
2.5%. 
-All interviewed clients pay a one￾time commission of between 1% and 
1.5%. 
members of Grameen model 
borrowing groups in which members 
guarantee one another. 
1 makers as security. 
6. Is the bank strict in repayment I - Zero tolerance is universally 
- Type of collateral or securlry 
- Guarantors and related 
arrangements 
collections? I enforced. 
7. What was the len-& of time 1 - Initial loans typically take one week 
- Loan sizes vary between 3,000 
pesos and 25,000 pesos. Average 
loan size is 12,000 pesos 
- Loan term in every case is either 3 
months or 4 months. 
- 20 clients receive daily collection 
visits, 6 pay weekly. 
- Most clients use one or more co￾between your applic&on and loan 
disbursement? 
8. What did you use the loan for? 
How has it helped your business? 
Your family? 
9. From whom do you borrow aside 
from the bank? 
11. Have you/would you promote the 
loan Program to others? 
to process. Subsequent loans are 
generally processed prior to the full 
term of the previous loan. 
- Most clients used loans for working 
capital. 
- Four clients invested part of loan 
amount in infrastructure 
improvements. 
- One client purchased tools. 
- Most clients have had experience 
with "5-6" lenders, but no longer 
borrow from them. 
- Two clients are members of 
cooperatives; one of them borrows 
regularly from the coop. 
10. Do you have savings other than in 
the bank? 
12. What can you suggest to improve 
the loan Program? 
- Two of the clients save with 
cooperatives. 
- One ciient saves with a commercial 
bank. 
- Most clients enthusiastically 
promote the Program with family, 
friends and neighbors. 
- Several clients are referred by other 
MABS clients. 
-Several clients indicated that they 
would prefer lower interest rates and 
longer loan term. 
- No respondents offered substantive 
suggestions for Program 
improvement. 
One client complained that his loan 
application took three weeks. 
One client indicated that she used 
part of her loan to buy school clothes 
for her daughter. 
- One client had never borrowed 
money prior to working with MABS. 
One respondent indicated that she 
would feel responsible for any 
referral that she would make, and is 
unwilling to accept the responsibility. 
G. MABS-M IMPACT ON RBAP/RBRDFI 
As described in Section IV.C.3 above, MABS-M implementation to date has 
included numerous activities intended to facilitate institutional development in RBAP. 
The MABS-M financed RBAP Strategic Development Plan represents substantial 
progress toward potential institutional development. The pleg process has generated 
dramatically improved awareness among RBAP leadership of the need for institutional 
development. 
Financial Markets International, Inc. (FMI) 27 USAID M.4 BS - M Project 
The impact that hMS-M has had on the Participating Bmks has p-ered tlhe 
attention of RBAP leadership. RBAP directors report that requests for participztion in 
the Program have been coming from their membership all over the Philippines. Ciezly, 
the MABS-LM Program has resulted in enthusiastic RBAP endorsement of micro 
enterprise financial services. 
A. INCREASE THE LEVEL OF MABS-M FUNDING DTJWNG THE BALANCE OF 
THE CURRENT CONTRACT TERM. 
USAID should allocate sufficient increased funding to enable the Program to 
continue operating at full current level of effort through the September 30,2001 
completion date. The current budget is insufficient due to start-up delays and unexpected 
expenditures associated with the establishment of an office in Cagayan de Oro and 
extensive, unanticipated management information system development requirements. 
The unbudgeted expenditures were made in consultation with USAID, and were 
determined to be essential to the successful implementation of the Program. (In 
retrospect, the additional expenditures were as essential as anticipated.) 
Without additional funding, MABS-M management would need to reduce the 
current level of effort by downsizing Program staff beginning in September 2000. The 
recommended funding would significantly increase impact by providing ongoing support 
for current Participating Banks in order to assure that long-term commitment to the 
"MABS Approach" is thoroughly institutionalized. Operating at its full current level of 
effort, the Program would also significantly broaden the Program's experience base in 
Mindanao by incorporating as many as 40 additional Participating Banks or bank 
branches by September 2001. More importantly, full operational funding would also 
enable MABS-M to implement other recommendations described below. 
Continued fdl fundig will allow for on-going, full-scale attention to 
development and application of "The MABS Approach". Greater return on the 
significant levels of investment in the development of the Program can be expected fiom 
continued evolution of the methodology, continuation of efforts to reduce the costs of 
program application and a larger experience base in Mindanao. 
The amount of additional funding that would be required to maintain WS-M at 
its current activity level remains to be determined, and has been the subject of 
correspondence and discussions between Chemonics and USAID (Annex J). MABS-M 
management has estimated that approximately $1 million of additional funding will be 
necessary to implement the balance of its current work plan. An updated plan and budget 
should be developed for MABS-M operation through September 2001 that would 
accommodate any changes that are determined to be necessary, including those that may 
be made as a result of this evaluation. 
Financial Markets International, Inc. (FMI) 28 USAID LWBS - M Project 
B. MABS-M SHOULD PLACE STRONGER ElMPHASIS ON PREPARING 
RBAP TO ASSUME RESPONSIBILITY FOR LONG-TERM MABS-M 
CONTINUITY. 
One of the major tasks assigned to the MABS-M Program is to develop the 
capabilities of RBRDFI/RBAP to mount its own Program of assistance to RBsICRBs to 
profitably provide services to micro enterprises. As described in Section IV.C.2 above, 
satisfactory progress has been made toward satisfying this task. However, MABS-M and 
USAID managers have maintained RBAP institutional development efforts in a 
"planning mode" pending the development of a demonstrably successful micro lending 
Program model. MABS-M management should develop a specific Work Plan task to 
complete and implement RBAP institutional development plans. The plan should 
include: 
a Implementation of those components of the RBAP Strategic Development Plan 
that are required to prepare RBAP for its role in supporting ongoing MABS-M 
activity. 
Extension of the term of The RBAP Program Development Advisor position for 
which MABS-M and RBAP are currently interviewing candidates to at least 18 
months. It is anticipated that the advisor would place priority emphasis on 
preparation of RBAP for its MABS-M related responsibilities. 
Development and implementation of a Mindanao-specific RBAP development 
strategy that includes an RBAP presence in Mindanao. AIl Participating Banks 
interviewed during the course of this evaluatian expressed strong opinions that 
RBAP should establish a permanent office in Mindanao for long-term MABS 
sustainability. A functional RBAP Mindanao presence would also facilitate much 
needed improved communications between the association and its Mindanao 
membership. 
C. MABS-M SHOULD STRENGTHEN ITS POLICY DIALOGUE PARTICIPATION 
WITH CPIP. 
CPIP management has indicated interest in engaging MABS-M and RBAP as 
partners in its policy dialogue efforts with the Philippine government. MABS-M 
management should incorporate specific coordination with CPIP into its work plans for 
promoting a micro finance agenda with the CenM Bank. 
D. MABS-M MANAGEMENT SHOULD CONTINUE TO REFINE, STANDARDIZE 
AND REDUCE THE COST OF "MABS APPROACH. 
MABS-M is now in a position to consolidate the impressive progress that it has 
made with the development of the MABS methodology. Long-term sustainability of the 
MABS-M initiative will depend heavily on the ease with which the "MABS Approach" 
can be assimilated by increasing numbers of RBsKRBs. Continued attention to 
evolution and cost reduction of the methodology must receive priority attention during 
the recommended phases of Program continuation and expansion. 
Financial Markets International, Inc. (FM. 29 USAlD kL.4 BS - M Project 
E. USD SHOULD FUND TI33 MABS-M PROGRAM FOR AN ADDITIONAL 
TWO YEARS. 
Continued monitoring, management and expanded application of the WS 
methodology can be expected to generate greater returns on the investments that have 
been made in Program design and development. The recommended additional program 
funding can be expected to reduce the risk of "backsliding" by PBs, funher consolidate 
and check any potential mutation of the methodology, and spread the introduction of the 
Program to the growing number of interested RBs/CRBs that have not yet had 
opportunity to participate. The Program fundamentals that have been developed during 
the Pilot and rollout stages should provide a solid basis on which to leverage expanded 
use of the methodology into new markets. 
The Scope of Work for this evaluation did not include a MABS-M cost -benefit 
analysis, and no such analysis is offered. It would be relatively simple to divide the 
numbers (current and projected) of new borrowers, repeat borrowers, savers, 
Participating Banks andlor other MABS-M beneficiaries into the total funds invested, to 
"assess" the benefit that MABS will have in Mindanao. However, full impact of the 
Program can best be measured over an extended period of implementation through a 
growing number of banks and bank branches. 
Although continued emphasis should be placed on Program efficiencv and cost 
containment. decisions regarding; on-going MABS-M funding; levels should not be based 
on cost-benefit analvsis of the Program at its current stage of development. Instead, the 
costs of Program design and development should be amortized over an extended period 
of implementation. It is reasonable to expect that the benefits of the Program will 
continue to accrue through its expansion beyond its current range of application 
Recommended objectives for the Program extension period include: v! 
Place maximum emphasis on RBAP institutional development and the appropriate 
and efficient transfer of the "MABS Approach" methodology to RBAP for 
ongoing use by RBs/CRBs.' MABS-M operational transition fiom design and 
implementation of methodology to institutional development should have already 
taken place during the current contract period. Long-tern sustainability should 
become the focus of the Program during the extension period. 
I; 
The Program should continue to provide "maintenance" support, as necessary, to 
all Participating Banks. Strict application of the "MABS Approach" methodology 
is essential for ongoing micro lending success. It is important that Participating 
Banks not be allowed to compromise the methodology by relaxing standards. 
0 
Expand to new Participating Banks and branches, particularly in areas not 
currently served. The contractor should assist RBAP in its "pilot phase" of 
ej 
progr& implementation by continuing to add more banks to the Program in 
Minhao. 
Financid Markets International, Inc. (FM) 30 USAID MBS - IM Project u 
Continue coordination with other Progms. Continued emphasis should be 
placed on relevant subtasks included in the original MABS-M contract, 
particularly policy coordination. 
F. INITIATE AN ASSESSMENT OF THE POTENTIAL FOR EXPANDING THE 
PROGRAM BEYOND MINDANAO. 
The Scope of Work for the evaluation of MABS-M does not include investigation 
of potential for expanding the Program beyond Mindanao. USAID managers have 
indicated interest in possible MABS-M expansion, and RBAP leadership has expressed 
strong interest in expanding the Program into the Visayas and Luzon. Since the 
Philippine system of RBs/CRBs operates throughout the country and there are positive 
indications of significant countrywide demand for micro fmance services, it is likely that 
the Program replication is feasible elsewhere in the Philippines. 
MABS expansion into Luzon andor the Visayas would oEer much broader 
opportunity for the Program to increase the number of participating banks and the 
number of micro entrepreneur beneficiaries. Since the "MABS Approach" has been 
"standardized", its introduction to new markets can be expected to be increasingly rapid 
and relatively inexpensive. The broadened marketplace will provide additional 
opportunity for amortization of the costs of Program design and development over a 
much larger number of beneficiaries. MABS expmsioc into new markets will also 
facilitate further evolution of the methodology under increasingly diverse circumstances. 
Having invested considerable resources in the development of the MABS-M 
Program model, it would also be appropriate to consider assessment of potential for its 
introduction in other countries. Should USAID wish to initiate investigation of possible 
Program expansion during the balance of the current contract, sufficient additional 
funcling will be required so as not to detract fiom ongoing MABS efforts in Mindanao. 
It is strongly recommended that any initiative to expand the Program beyond 
Midanao should be taken by RBAP with technical support from the contractor in order 
for RBAP to assume ownership and responsibility for the Program. MABS expansion 
into Luzon and/or the Visayas would provide RBAP (with contractor support) the 
opportunity to gain "on-the-job" experience with Program installation and management. 
Given corresponding resources, the contractor could facilitate investigation of 
Program expansion with market studies and other exploratory activities through RBAP 
during the course of the current contract. 
Financial Mimkets - InterPratiod. Inc. (FM) 3 1 USAID MABS - M Prqiect 
kW*rnS 
Annex A: Scope of Work 
hex B: Work Schedule 
Annex C: Documents Reviewed 
Annex D: List of Persons Interviewed/Meetings 
Annex E: Participating Banks Interviewed 
Annex F: Non-Participating Banks Interviewed 
Annex G: Clients Interviewed 
Annex H: Participating Bank Survey Instrument 
Annex I: Client Survey Instrument 
Annex J: Chemonics/USAID Correspondence (Mot included in this document, on& 
available in separate hard copy format at USALL;,/Maanila) 
Annex K: Work Plan Analysis Matricies 
Finarrcial Markers International, Inc. (FM4 USAID MABS - M Project 
3+ 
MABS-M blID TEM EVALUATION 
l!wNErnS 
Financial Markets International, Inc. (FIWI') USAlD MABS - rM Project 
ANNEX A 
Scope of Work 
BACKGROUND 
In January 1998, USAID and the Rural Bankers Association of the Philippines initiated 
the Microenterprise Access to Banking Services - Mindanao (MABS-M) Program. The 
ultimate objective of the Program is to bring about a significant expansion of formal 
sector financial services, both lending services and deposit services, to microenterprises 
and small producers. In doing so the Program hopes to help overcome the constraint to 
more rapid and more widespread economic growth of Mindanao that is posed by the fact 
that most microenterprises and small producers do not have access to formal sector 
financial services, and must rely on expensive informal credit sources. It is believe that, 
if large numbers of microenterprises can obtain access to significantly less expensive 
formal sector financial services, these enterprises will have greater prospects for 
profitability and growth. 
Under the Program, at least 20 Rural Banks in Mindanao are being provided the 
assistance they require in order to develop the capability to profitably provide services to 
the microenterprise sector. It is hoped and expected that the experience of these banks 
under the Program will demonstrate to them that it is sensible to offer services to the 
microenterprise sector as a regular part of their business - because it is very profitable to 
do so. It is further expected that the successful example of the Rural Banks participating 
in the Program will encourage other Rural Banks to look seriously at initiating and/or 
expanding services to the microenterprise sector. 
MABS-M support provided to participating banks, for the most part, is technical 
assistance and training. Some limited commodity support and software is also provided. 
No lending funds or capital contributions are provided to participating banks. 
(It should be noted that a "Rural Bank" is a formal bank category in the Philippines, 
supervised by the Central Bank. Rural Banks, generally, are small privately owned 
banks. While they quite commonly are located in rural areas, being located in a rural area 
is not a requirement for classification as a rural bank. Quite commonly, Rural Banks are 
located in urban areas. There are approximately 800 Rural Banks in the Philippines, with 
about 130 located in Mindanao). 
USAID'S principal partner in the Program is the Rural Bankers' Association of the 
Philippines (RBAP). The RBAP is a national level organization. One of the sub￾objectives of the Program is to strengthen the RBAP, so as to better enable it to lead an 
effort to expand the MABS effort nationwide. 
The MABS Program, as designed, was to have a four-year life. (The Program design 
incorporates the possibility of a two year extension of the program, however, should this 
appear warranted). At this point, the Program is about midway through its planned four￾year life and progress appears appropriate. The target of 20 participating banks is within 
reach. (Four banks entered the program in the Summer of 1998 and, at this point, have 
"graduated" from the Program; an additional 10 banks entered the Program in early 1999 
Financial Markets International, Inc. (FMI) USAID MABS - M Project 
and are still going through the Program; and a further six banks have recesdy enrere:! ti?; 
Progam). Re~orts on growth of microenterprise clientele of t!iese banks are 
encouraging. Reports on profitabiiity of servicing the clientele dso appear exouraging. 
OBJECTIVE 
The consultant's objective is to assess the progress of the MABS-M Program and identify 
areas where the Program might be strengthened or otherwise modified. 
The consultant should address and answer the following questions: 
- are the objectives of the Program realistic? Does it appear probable or likely that 
the Program will result in the development of a real capability on the part .of Rural Banks 
to profitably service the microenterprise sector? Does it appear likely that Rural Banks 
participating in the Program will initiate or signihcantly expand the services they are 
providing to the microenterprise sector because of skills/knowledge gained through 
participation in the MABS-M Program? Does it appear likely that participating Rural 
Banks will make servicing the microenterprise sector a major part of their business on a 
continuing basis? Does it appear likely that the experience of participating Rural Banks 
will persuade non-participating Rural Banks to initiate or significantly expand services 
provided to the microenterprise sector? 
.a. 
- is the approach being followed by the MABS-M Team sensible? Is the balance 
between on-site technical assistance, and off-site training appropriate? Are 
subjects/topics covered by technical assistance and training appropriate and necessary? 
Are important subjects/topics oot being covered? Is support being provided to 
participating Rural Banks (i.e., computer hardware and software, salary support for newly 
hired microfinance staff, etc.) adequate and appropriate? Are efforts to "standardize" the 
package of services and the support provided to all participating banks sensible and 
realistic? What particular services and support might better remain "customized?" 
- are criteria used in selection of participating banks appropriate? Should any other 
criteria be used? 
- are the "microfinance best practices" being endorsed for use by the participating 
banks in managing their microfinance programs appropriate? Should any additional 
"practices" be promoted? Should any of the currently promoted practices be modified or 
dropped? 
- should the Mas-M Program be promoting any particular minimum or maximum 
level of microenterprise clientele as ideal or desirable for participating Rural Banks? 
- Are efforts being carried out and/or being planned by the MABS team to alert non￾participating Rd Banks of results being obtained by participating Rural Banks adequate 
and zppropriate? Should any other efforts be mounted? 
- are institutional strengthening efforts focused on the RBAP adequate and 
appropriate? What elemeats might be added or dropped or modified? Does it appear 
Financial Markets Interna:ior.al, inc. (FIMI) USAD MABS - M Project 
likely that RBAP will be in position at the end of the current MABS-M Program period to 
lead/carry on the effort to assist other Rural Banks to develop the capability to profitably 
service the microenterprise sector? 
- would you recommend that USAID authorize and finance an extension of the 
MABS-M Program to allow expansion of the effort to Rural Banks outside of Mindanao? 
If so, what modifications of the Program would you recommend? 
The consultant should note that the above listing of questions to be answered is being 
provided as a guide. While USAID believes obtaining answers to these questions is 
necessary, the consultant may identify other issues and questions that he/she believes 
important and also address those issues and questions in hisher report. 
APPROACH 
In carrying out this evaluation, the consultant should: review all relevant documentation 
concerning the MABS-M Program; hold discussions with relevant US AID, GOP, MABS￾M, and RBAP staff., visit 5-8 participating Rural Banks (including at least one from each 
of the three "rollout groups") and make assessments as to their progress in establishing a 
continuing capability to profitably service a microenterprise clientele and their actual 
intention of doing so; and visit some non-participating Rural Banks to obtain views of 
their management or ownership about the MABS Program, and about prospects for 
servicing a microenterprise clientele. 
It is estimated that some six weeks will be required to carry out this evaluation, and that 
the services of two individuals will be required. Both of the individuals should have 
extensive expertise both in banking and in microfinance. They should be familiar with 
the experiences of banks around the world which, successfully or otherwise, have 
attempted to provide services to microenterprises. They should also be familiar with 
successful NGO-managed microfinance programs, and with "microfinance best 
practices." 
REPORTS 
An interim report on the consultant's findings should be prepared and presented midway 
through this effort (i-e., at the end of the third week). A draft final report should be 
provided prior to he consultant's departure from the Philippines. ~ofiowin~ receipt of 
comments from USAID and other concerned 
parties on the draft, a final report should be provided within 30 days of the consultant's 
departure from the Philippines. The final report should be between 15 and 30 pages in 
length and should address all questions and issues listed above. 
Financial Markets International, Inc. (FMZ) USAID MABS - M Project 
Work Schedule 
March 28 8:30AM 
Manager 
Day at MABS office- logistics, briefings, materials 
review. 
Available for meetings: 
- Lief Doerring, Home Office Project 
- Phil Broughton, COP 
- Joanna Ledgerwood, DCOP 
- John Owens, Cagayan Regional Manager 
- Peter Glibbery, MIS Manager 
Bing CadizA3esearch Assistant arrives at WS 
Meeting with Alex Buenaventura/RBRDFI 
MABS Office/Documents Review 
March 30 7:15 AM 
8:30 AM 
1o:oo- 11:oo 
1 1:oo-12:oo 
March 3 1 8:30-11:30 
ll:3O-l2:3O 
12:30-2330 
230-3~30 
3:30-4:30 
4:30-6:OO 
5:30-6:30 
April 1 7:30-11:30 
11:30-2:30 
2:30-3:30 
3:30-5:OO 
April 2 
Leave for Airport 
Flight to Cagayan de Oro 
Briefing at MABS Cagayan Office 
Cooperative Bank of Misamis Oriental, Chainnan 
and MFU Staff 
Lunch 
Branch visit 
Client visits 
Drive to Talisayan 
Meet with Manager, Rural Bank of Balingasag (non￾participating bmk) 
Stay at Matangale Hotel 
Financial Mu;kets Znrernutional, Inc. (FMI) 
Rural Bank of Talisayan 
Lunch 
Travel to Butuan (Green Bank) 
Meeting with Chairman and President 
Travel to Bayugan (Green Bank branch) 
Briefing, market visit 
Travel to Butuan 
Overnight at Hotel Almont 
Travel from Butuan to Santo Tomas 
Lunch and Attend Santo Tomas Savings Workshop 
Travel to Davao 
Attend Client Cash Row and Repayment Workshop 
Free 
USAID MABS - M Pmject 
April 3 
7:30-8:30 
8~30-12:OO 
12:oo-1 :oo 
1 :oo-2:oo 
April 4 8:OO-9:00 
8:30-1 l:3O 
12:oo-1:oo 
April 5 
April 6 
April 7 9:OO-12:OO 
215-3:OO 
April 8-9 
April 10-13 
April 10 7:30 pm 
April 12 2:00 pm 
April 13 
April 14 8:30 am 
Consultant 1 
Travel to Babak (Century RB) 
Century RB visit, client visits 
Lunch 
Travel to Davao 
Consultant 2 
Travel to Montevista Branch 
Monevista briefing, client visits, lunch 
Travel to Montevista Headquarters Branch (non￾participating bank) 
Travel to Davao 
Travel to Rural Bank of Panabo (drop C~nsultant 1) 
Panabo RB briefing and client visits 
Lunch 
Travel to Santo Tomas (Consultant 2) 
Santo Tomas RB briefing and client visits 
Lunch 
Travel to RB Panabo 
Travel to Davao 
MABS Office 
MABS Office 
Meeting with USAID in Davao 
Meeting with Lois Kitsch and Lucy Ito, CUES 
Financial Markets International, Inc. (FMI) 
Weekend 
As required 
Meet with Alex Buenaventura 
Meet with Jo-Ann de Belen, MEDCO 
MABS Office/Fly to Manila 
Meeting with USAID/Economic Development 
Office 
Meeting with Rural Bankers AssociationLito 
Fuentesfino 
Evaluation Presentation To USAID 
USAID MABS - M Project 
April 17 
Meeting with USAIDICPI? St& 
Meeting with USAlDNce Ryan 
Delivery of final draft report to USAlD 
Financial Markets Inrernational, Inc. (FW) USAID MABS - M Project 
List of Documents 
1. Microenterprise Access to Banking Services in Mindanao (MABS-M), Development 
Activity Approval Document (DAAD), Office of Economic Development, 
USAID/Manila, February 1997. 
2. Contract No. 492-C-00-98-00008-00 between USAlD/ManiIa and Chemonics 
International, Inc., December 5,1997. 
3. Evaluation of the Pilot Phase of the Microenterprise Access to Banking Services in 
Mindanao (MABS-M) Program, Final Report, Virginia Abiad, March 22, 1999. 
4. Quarterly Performance Monitoring Plans, MABS-M, November 30,1997 - December 
3,1999. 
5. An Alternative Approach to Rural Financial Intermediation: The Philippine 
Experience, Meliza Ayabin and Jorge L. Daly, May 1996. 
6. Rural Banks and Microfinancing Chemonics International, Inc., Joseph Y. Lim, 
December 1998. 
7. Case Study: Informal (5-6) Money Lenders, Chemonics International, Inc., Arah D. 
Limpao-Osop, November 27, 1998. 
8. MABS-M Program Technical Assistance Manual (MABS Approach), Chemonics 
International, Inc., March 23,2000. 
9. MABS-M Bank Binders for Rural Bank of Montevista, Rural Bank of Santo Tomas, 
and Rural Bank of Panabo. 
10. Executive Workshop on Delinquency Management for Rural Banks: Developing a 
Culture of Zero Tolerance Against Past Due Loans, MABS-M Program, September 1999. 
1 1. Performance Monitoring: Participant Banks, WS-M Program, September 1999. 
12. Rural Bank of Panabo: A Case Study, MABS-M Program, January 2000. 
13. MABS-M MIS Strategy, MABS-M Program, Peter Glibbery, March 21,2000. 
14. Assignment Completion Report: Rural Bankers Association of the Philippines, 
Laurel H. Dauben, October 1999. 
Financial Markets International, Inc. (FMI) USAID MABS - M Project 
V0 
List of Persons Interviewed 
USAID, MABS, ~AP~DFI, GOP, and other Organizations 
1. Patricia Buckles, Mission Director, USAIDManila 
2. Joe Ryan, Chief, OED, USAhD/Manila 
3. Robert Barnes, Economic Development Advisor, USAIDManila 
4. Teresita Espenilla, Cognizant Technical Officer, USAID/ManiIa 
5. Phillip Broughton, Chef of Party, MABS-M, Davao 
6. Joanna Ledgerwood, Deputy Chief of Party, MABS-M, Davao 
7. f eter Glibbery, MIS Manager, MABS-34, Davao 
8. Lief Doerring, Project Manager, Chemonics International Inc., Washington, D.C. 
9. Eduardo de Castro, Banking Operations Specialist, MABS-M, Davao 
10. Suj Ronquillo, Banking Consultant, MABS-M, Davao 
11. Arah Limpao-Osop, Banking Consultant, MABS-M, Davao 
12. Mercy Almanzor, Office Manager, MABS-M, Davao 
13. Alex Buenaventura, RBRDFI Executive Director, Davao 
14. Roberto Doromal, President, Federation of Rural Bankers, Davao 
15. John Owens, Regional Manager, MABS-M, Cagayan de Oro 
16. Meliza Agabin, Senior MicorfinancePolky Specialist, MABS-M, Cagayan de Oro 
17. Cecilia Dicdiquin, Banking Operations Speicalist, MABS-M, Cagayan de Oro 
15. Ma Rosario Tan-Padua, Research Assistant, MABS-M, Cagayan de Oro 
19. Lois I. Kitsch, Project director, Credit Union Empowerment & Strengthening 
(CUES), 
Davao 
20. Lucy Ito, Director of Technical Services, World Council of Credit Unions, Madison, 
Wisconsin (on technical assignment to CUES in Davao) 
21. Jo-Ann de Belen, Executive Director, Mindanao Executive Development Council 
(MEDCO), Davao 
22. Maricar Meachie Celestial, Chief Economic Development Specialist, MEDCO 
23. Jason C. Magnaye, Supervising Economic Development Specialist, MEDCO 
24. Dr.Gilbert Llanto, Chief of Party, Credit Policy Tmprovement Proam (CPIP), 
Manila 
25. Carlito B. Fuentesfina, President, Rural Bankers Association of the Philippines 
(IIB AP), Manila 
26. Jerry B. Coloma, Jr., Treasurer, BAP, Manila 
27. Pablo L. R. Ronquillo, Chief Operating Off~cer, RBAP, Manila 
28. Anthony Petdcorin, MIS/M&E Specialist, RBAP, Manila 
29. Jose 0. Lustre, President, Rural Bank of Jaen, hc. (RBAP meeting), Manila 
Financi~l Markets Inrernational, Inc. (FMI) USAID MABS - M Project 
ANNEX E 
Participating Banks Interviewed 
1. Edgardo T. Gamolo, Chaiiman, Cooperative Bank of Misamis Oriental, Cagayan de 
Or0 
2. Cynthia S. Jago, Loan Officer, Cooperative Bank of Misamis Oriental, Cagayan de 
Or0 
3. Famarie C. Duque, MFU Supervisor, Cooperative Bank of Misarnis Oriental, Cagayan 
de Or0 
4. Calvin Akut, Jr., MFU Account Officer, Cooperative Bank of Misamis Oriental, 
Cagayan de Oro 
5. Glabiolus Jabitad, MFU Account Officer, Cooperataive Bank of Misamis Oriental, 
Cagayan de Oro 
6. Ernesto C. Gdenzoga, PresidendGeneral Manager, Rural Bank of Talisayan, 
TaIisay an 
7. Robert Obejero, MFU Account Officer, Rural Bank of Talisayan, Talisayan 
8. Mendru Sumastie, MFU Account Officer, Rural Bank of Talisayan, Talisayan 
9. Ismael Andaya, Chairman, Green Bank of Caraga, Butuan 
10. Joseph Omar 0. Andaya, President, Green Bank of Caraga, Butuan 
11. Abelardo S. Reyes, Area Manager, Green Bank of Caraga, Bayugan 
12. Corrcepthn E. Bacatan, General Manager, Centuxy Rural Bank, Babak 
13. Africo R. Bordios, Board Member, Century Rural Bank, Babak 
14. Mariano Solomentio Solis, Founder, Rural Bank of Santo Tomas, Santo Tornas 
15. Rosele Solis, President/General Manager, Rural Bank of Santo Tomas, Santo Tomas 
16. Lourdes Pineda, Compliance Officer, Rural Bank of Santo Tomas, Santo Tomas 
17. Edna Ani, MEU Supervisor, Rural Bank of Santo Tomas, Santo Tomas 
18. German Maceda, Branch Manager, Rural Bank of Montevista, Pantukan 
19. Armando Yambao, General Manager, Rural Bank of Panabo, Panabo 
20. Laarni Timtim, MFU Supervisor, Rural Bank of Panabo, Panabo 
Financial Markets International, Inc. (FMI) USAID MABS - M Project 
Yb 
Non-Participating Banks Interviewed 
1. Reynddo Nabcc, Manager, Rural Bank of Balingasag, Salingasag 
2. Percival B. Cantiller, Director, Rural Bank of Montevista, Montevista 
3. Jason Datquigan, Loan Supervisor, Rural Bank of Montevista, Montevista 
4. Robeno Doromal, Rural Bank of Malita, Davao Del Sur 
Financial Markets International, Inc. (FM) USAID MABS - M Pxjecr 
- 
ANNEX G 
Clients Interviewed 
(Clients of Cooperative Bank of Misamis, Cagayan de Oro) 
1. Tessie Sab, Sari-S~ Store 
2. Rowena Trinidad, Vegetable Vendor 
3. Verel Villareal, Furniture Maker 
4. Angelito Cagas, Drygoods Vendor 
5. Edel Mabatot, Restaurant and Boarding House 
6. Lourdes Manticaron, Sari-Sari Store 
7. Helen Espirat, Restaurant 
8. Agnes Macabodbod, Sari-Sari Store 
(Clients of Rural Bank of Talisayan) 
9. Nicomedes Cago, Bagmaker 
10. Arhe Dahl Bacarro, Rice and Peanuts Vendor 
11. Michelle Go, Drygoods Vendor 
12. Belen Sabandal, Sari-Sari Store 
13. Susan Beloy, Rice Vendor and Sari-Sari Store 
14. Alda Quico, Mini Cinema and Sari-Sari Store 
(Clients of Rural Bank of Montevista pantukan]) 
15. Alrno Chavez, Dried Fish Vendor 
16. Jiona Arnpilan, Sari-Sari Store/Rice Vendor 
17. Rosario Regidor, Drygoods and Ice Cremevendor 
(Clients of Rural Bank of Santo Tomas) 
18. Celso Alaan, Vinegar and Floormat Maker 
19. Rebecca Cordero, Mini-Grocery 
20. Helconida Zamora, Fruit Vendor 
(Clients of Century Rural Bank [Babok]) 
21. Cecilio Dedibar Jr., Meat Vender and Sari-Sari Store 
22. Alfonso Navaja, Bakery 
23. Concepcion Paster, Hardware 
(Clients of Rural Bank of Panabo [part of Network Bankl) 
24. Rex Binobo, Motorcycle Repair Shop 
25. Fortunato Viarho, Noodle Maker 
26. Dado Avellana, Rope Maker 
Financial Markets International. Inc. (FMI) USAID MABS - M Project 
Participating Bank Survey Instrument 
1. What do you think about MABS-M? 
2. What is the image of MABS-M in the rural banking industry? 
3. What are your expectations of the program? Are they being met? 
4. Do you think that providing micro enterprise financial services is profitable to your 
bank? 
5. Do you plan to expand micro enterprise services in the future? 
6. What technical assistance and other services are being provided by MABS? Are they 
appropriate for your bank? If not, why? 
7. Is the balance between MABS on-site training and off-site training appropriate? 
8. Are the subjects/topics included in MABS tec,hical assistance and training 
appropriate? If not, how would you change them? 
9. What percentage of your total portfolio of borrowers and savers is micro 
entrepreneurs? What is your projected percentage of micro enterprise clients as part of 
your total clientele for the future? 
10. What is your current average micro loan size? What is our projected micro loan size 
in the future? 
11. What commodity andor staff support are you receiving from MASS? What changes 
would you suggest? 
12. Can your bank compete effectively with informal lenders? 
13. Does your bank participate in the PCFC Program? If so, how does the program 
compare/compete with the MABS Program? 
14. Are there any significant legal or regulatory limitations that may affect the expansion 
of your micro lending and saving services? What are they? 
15. What are your eligibility criteria for micro lending? 
16. How do you decide if you want to give someone a micro loan? 
17. What are the new practices introduced by WS that you are currently applying? 
Financial Markers Internarional. Inc. (FMI) USAID MABS - M Project r." I 
18. Do you think that the experience of your bank will persuade non-participating bds 
to initiate micro lending and savings services? 
19. Should the Rural Bankers Association continue to support micro enterprise at the 
conclusion of the MABS Program? What types of services should RBAP provide? 
20. Having received MABS services, do you think that other banks would be willing to 
pay for these services on a cost-recovery basis? 
Financial Markets International, Inc. (FMfi USAID MABS - M Project 
CIient Survey Instment 
1. Do you operate more than one business? 
2. How many people (including unpaid family members) work for you? 
3. What are your gross sales per business? (Indicate if daily, weekIy or monthly.) 
4. How many times have you borrowed from the program? 
5. What are the terms and conditions of your current loan? 
- Interest rate 
- Loan amount 
- Repayment period 
- Type of collateral or security 
- Guarantors and related arrangements 
6. Is the bank strict in repayment collections? 
7. What is the length of time between your application and loan disbursement? 
8. mat did you use the loan for? How has it helped your business? Your family? 
9. From whom do you borrow aside from the bank? 
10. Do you have savings other than in the bank? 
11. Have you/would you promote the loan program to others? 
12. What can you suggest to improve the loan program? 
Financial Markets International, Inc. (FMZ) 
ANNEX J 
Chemonics/USAID Correspondence 
(Hard copy only - Available at USAIDManila) 
Financial Markets International, Inc. (FMI) USAID MABS - M Project 
Work Plans Analysis matrices 
(Under separate cover, hard copy only - Available at USAID/Manila) 
Financial Markets International, Inc. (FMI)