It was a typical bright and sunny morning as I walked down the Talibon Pier towards the tiny boat that would take me island hopping for the day. I was greeted by six smiling loan officers already seated inside the boat; they watched as I maneuvered myself down steep sloping rocks, balanced on a beam to cross the water, and finally jumped onto the boat that would take me on an incredible forty-five minute ride through the Philippine Sea.
The water was calm, glistening under the sun’s rays. I couldn’t keep myself from uttering the same words over and over again: “This is so amazing. You all are so lucky to witness such natural beauty on a regular basis.”
After a few stops and many laughs, we arrived at Nocnocan Island – a tiny island that is only accessible by boat. We pulled up on the shore and walked through a maze of homes and shops, the alleys approximately three and a half feet wide. At the cluster meeting house, where the CEVI borrowers gather on a weekly basis, I was able to learn about island life and how the microfinance loans were making an impact on the Nocnocan community.
IMPROVED WATER QUALITY & ACCESSIBILTY
Until a few years ago, the 300 or so families of Nocnocan did not have a source of clean potable water. When they were unable to collect sufficient amounts of rainwater or couldn’t afford to travel to the mainland by pumpboat to purchase fresh water, they had no option but to use the same water for bathing, cooking, drinking and cleaning which led to high incidents of diarrhea, amoebiasis and skin disease.
With the help of microfinance loans, Nonocan resident Maria Bella built two water tanks to collect and filter rainwater so that members of her community could have easy access to clean drinking water. Maria Bella realized early on that fresh water is a precious commodity and by investing in water tanks, she had not only helped her neighbors, but increased her income.
Another resident of Nocnocan, Valeriana, began her running her own fishing business 10 years ago, expanding it over the years with the help of loans she has received from CEVI. Valeriana commented, “[the loan] was a great help during times of crisis and low income.” After overcoming those challenging times she was able to help her neighbors by generating job opportunities. Valeriana now owns 4 pump boats which enable 22 men from her community to fish and provide for their families.
PUSH FOR EDUCATION
Most adults on the island have some primary school education, few have attended some high school, and it’s rare to find people who have attended college. The majority of the residents do not have salaried employments – they instead need to focus on their own business ventures. It was interesting that an overwhelming percent of all Kiva clients that I interviewed mentioned that their dreams and goals were for their children to complete their studies and become professionals. A rough breakdown of current schooling of the children of Nocnocan would reflect that >90% of the kids attend elementary school, approximately 70% attend high school and about 10% attend the college (both the high school and college are located on the mainland). Although most of the borrowers did not have the option to pursue further education, many see value in educating their children so that they can acquire the skills and knowledge necessary to thrive in professional environments.
Although the presence of microfinance on the island of Nocnocan has had many positive effects, there are still some issues that need work. Based on my observation, the issue of credit pollution is the most pressing concern. As other microfinance institutions have begun to operate in the region, many clients have become increasingly dependent on loans, using one loan to repay another. Unfortunately, most clients with multiple loans are unable to handle their debts, which in turn diminishes their financial credibility. The lack of a financial regulatory board in the Philippines makes it difficult to make policies that limit microfinance institutions from lending to clients who have multiple loans. This also makes it difficult to know just how many clients have multiple loans.
So how can CEVI and other entities resolve the issue of credit pollution?
The loan officers at CEVI are trained to encourage clients to take one loan at any given time. They educate clients on money management, emphasizing the challenges of managing multiple loans. The loan officers urge clients to seek the services of the one institution that best suits their needs, even if the clients prefer a competitor.
I saw many benefits of microfinance on Nocnocan Island – I met small business owners who have grown their businesses and created jobs, I learned of improvements in water quality and health, and witnessed parents passionately discuss their plans to educate their children so that they would have more options as adults. I also saw an area that needs improvement and if other microfinance institutions in the Philippines follow in CEVI’s footsteps and become accountable to their clients, I’m certain that the issue of over-indebtedness will be addressed.
As we boarded the boat and I said goodbye to the friendly people of Nocnocan, I began to reflect on my day. I had learned about the successes and challenges the residents of the island faced, I noted areas for improvement, and I heard how microloans impacted the small community. I felt satisfied yet distraught. Helpful yet helpless. Inspired yet let-down. I was happy to know that the loans had benefited the clients I met but sad to know that some might have been struggling with multiple loans. I was thrilled to hear from the clients so I could report to the Kiva community but upset that I could do nothing more than just listen. I was humbled by the generosity and optimism of the clients, but disheartened that despite living in a world that has become so technologically advanced, the people of Nocnocan didn’t have electricity. Needless to say, it was a day to remember.
Kaajal Laungani has completed her Kiva Fellowship at Community Economic Ventures, Inc (CEVI) in the Philippines. She had a wonderful time exploring the beautiful island of Bohol and soaking up the great Filipino culture.