> Posted by Nika Tumao, Analyst at Global Treasury, Credit Suisse
This post is the third of a three-part series from Credit Suisse Virtual Volunteers, sharing reflections and insights from their investigations into the state of financial inclusion for persons with disabilities (PWDs) across several country contexts. The three posts will examine past efforts and offer potential solutions for creating more inclusive societies in Ecuador, India, and the Philippines. The post begins:
If we built a microfinance institution (MFI) focused solely on persons with disabilities (PWDs), what would it need to do to be successful? I examined disability inclusion in the Philippines to find out.
Laws in the Philippines support access by persons with disabilities (PWDs) to many of the elements necessary to succeed in life, including employment, education, infrastructure, and rights in court. Although these laws are well-intentioned, the Philippines lack the government budget to create and staff regulatory agencies that make sure they are effectively implemented . Here is where self-help groups, NGOs and MFIs have room to address the unmet needs of PWDs.
In looking into the financial products available to PWDs, I discovered that MFIs in the Philippines market their products to the poor, but they don’t target them to the needs specific to PWDs nor do they offer multiple products exclusively for PWDs, reflecting the diversity of disabilities and needs. It would seem that MFIs view PWDs as a subset of the poor: they wouldn’t explicitly reject a PWD loan application but neither would it specifically market its products to PWD.
From my research, I found that the organizational model that best serves PWD’s financial needs is often a cross partnerships between MFIs and NGOs. Such a partnership is exhibited between Leonard Cheshire, a disability-focused NGO in the Philippines, and an MFI called Alalay sa Kaunlaran Foundation Inc (ASKI). The partnership provides group lending programs to PWDs or their family members, and has reached 1,044 borrowers to date. One client family, Lisa and her husband Luoloi, sought assistance after Luoloi became disabled from gunshot wounds. The couple borrowed money from Leonard Cheshire and ASKI to set up a small snack store, and as a result, they’re in a financial position to better support their children’s education and even put some extra money into savings.
Tahanang Walang Hagdanan, an NGO whose name translates to “Home without a Staircase,” resembles this NGO-MFI pairing within a single organization. Established in 1973, Tahanang Walang Hagdanan originally began as an NGO for PWDs, and later innovated its services to include microfinance. The organization works to improve the lives of PWDs through education, training, medical assistance and livelihood. It operates as a business and workshop center, providing livelihood opportunities, while also addressing shelter and health needs. The business and workshop center provide the capital, materials, and machinery to make a multitude of products, like wheelchairs, bags, candles, educational toys, and furniture. I love the “all-in-one” concept of this organization: PWDs are provided with welfare services, education and microfinance.
What I learned from both examples is that while we can try to make MFIs more PWD focused, we can also turn the tables and make NGOs that serve PWDs more microfinance focused. We can leverage existing organizations that have the network of PWDs and help them provide microfinance products. It’s all about building partnerships between established groups and MFIs. Each group can contribute its own expertise.
Disability insurance is another relevant product, because people can acquire a disability at any time, as in the case of Lisa and Luoloi. The Center for Agriculture and Rural Development (CARD) MFI offers microinsurance through a simple mutual fund called the Members Mutual Fund, which covers the death costs of family members. The fund builds on the rural Filipino custom of “damayan” in which community and relatives contribute cash to the family of a person who just passed away. In turn, the supported family is expected to contribute cash to other families in the future. The fund has been well received, and has expanded to providing disability insurance. The Members Mutual Fund highlights the power that comes from MFIs’ modeling financial products, for PWDs or otherwise, after local customs.
Though it’s important to acknowledge their merits, these examples of existing financial products illustrate the opportunity to expand financial services for PWDs. For example, MFIs could partner with providers of wheelchairs to finance their purchase through loans or leasing. An increase in accessibility from acquiring a wheelchair could very well result in new opportunities for employment and productivity and ease the burden of paying back a loan.
As promising as any existing or hypothetical financial product for PWDs might be, they create no impact if clients don’t know about them. Arguably, this component of communication is the biggest missing link currently impeding PWDs achieving full financial inclusion. In the Philippines’ current environment MFIs appear to be disappointingly ineffective at reaching PWDs, and few PWDs appear to aware of microfinance options. Support from government and NGOs could very well help to bridge this connection.
One instance of marketing and communications success, however, is between the People’s Credit and Finance Corporation (PCFC) and the Philippine Federation for the Deaf (PFD). At one event, using sign language, the corporate communications director of PCFC explained its products and services available to microentrepreneurs. After the presentation, there was an open forum in sign language, giving the PFD members the ability to raise questions. The credit counseling opened the PFD’s eyes to opportunities they did not know existed. This demonstrates how important communication is to reaching PWDs. It takes a conscious and deliberate effort to reach PWDs in a manner that enables understanding.
Finding out more about the specific needs of PWD opened my eyes to challenges of providing microfinance to PWD but it also opened my eyes to the many ways we can help PWD live free and productive lives. To answer my initial question on how to make a successful MFI focused on PWD, we need two things: communication and caring products. We need better coordination between PWD groups, self-help organizations, the government, and MFIs. We also need products tailored to PWD needs and to local customs. There are good models, but as long as we see underserved PWDs, we can do more.
Nika Tumao is an Analyst in Global Treasury at Credit Suisse.
Image Credit: Leonard Cheshire
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