The fourth European Microfinance Award, which focused this year on food security, has been awarded to Alalay Sa Kaunlaran Incorporated (ASKI) of the Philippines for its work serving people in rural areas with traditional financial services as well as community development efforts. Executive Director Rolando Victoria of ASKI, who is pictured at the right, stated that, “The motivation at the time [of our founding] was credit…. Now we were able to install a hanging bridge…linking farmers to markets.” Another way that ASKI has assisted its clients is by linking groups of customers with major buyers. A signature achievement was working with government partners to connect small-scale growers of onions and cassava with fast-food restaurant chain Jollibee Foods Corporation, which reported sales of PHP 44 billion (USD 1 billion) during the year ending June 2012. Mr Victoria reported that one of the challenges ASKI had to overcome was convincing farmers of the value of having a guaranteed customer with a price set in advance, even if market prices might turn out to be higher after the harvest. The award was presented as part of European Microfinance Week, which closes in Luxembourg on November 16.
In advance of the presentation of the award, Mr Victoria said that if his organization were to win, it would use the cash prize of EUR 100,000 (USD 127,000) towards financial education efforts. ASKI reports total assets of USD 32 million, a gross loan portfolio of USD 25 million and deposits of USD 4 million as of 2011.
The other two finalists for the award were Kompanion Financial Group of the Kyrgyz Republic and Banco para el Fomento a Iniciativas Economicas (FIE) of Bolivia.
Kompanion was recognized for its efforts to promote agriculture such as through the use of greenhouses, fighting desertification, training on cellar construction to improve storage options and a “garden-in-a-box” effort to diversify families’ diets. The institution selects the communities it will target based those have lower average income levels and less access to financial services. Clients are rewarded for attending trainings with lower loan rates, and they may also benefit from tools such as tree pruners and access to the 16 agronomists and 17 veterinarians that Kompanion keeps on staff. Olesia Paukava of Kompanion explained that the result of these efforts is satisfied employees as well as satisfied clients. As of June 2012, Kompanion reports to the US-based nonprofit Microfinance Information Exchange (MIX) a gross loan portfolio of USD 62.5 million and 132,000 active borrowers.
General Manager Elizabeth Nava Salinas of Banco FIE described how her institution has had to learn many things as part of its move from offering individual loans in cities to serving rural areas: “It is a challenge because of poor infrastructure…[and clients’] lack of title to land requires new techniques….” Banco FIE has been involved in developing value chains in coffee, quinoa, fruit and milk. The institution charges 5 fewer percentage points on an annual basis in rural areas versus in urban areas. Ms Nava Salinas explained that one of the benefits of its success in rural areas is a slowing of migration from rural areas to cities.
The European Microfinance Award has been presented every other year since 2006 recognizing innovation in a different area of specialization each time. The EU’s European Investment Bank hosted the award ceremony and participates on the selection committee. Funding for the award is provided by the Luxembourg Agency for Development Cooperation (LuxDev).
This content is sponsored by the European Microfinance Platform (e-MFP), the organizers of European Microfinance Week. It is the fourth in a series of articles covering the proceedings of the event, which is taking place in Luxembourg from November 14 to November 16. MicroCapital is reporting onsite throughout this time.
November 15, 2012, “SPECIAL REPORT: Sanjay Sinha of M-CRIL Calls Overexuberant Growth ‘Recipe for Disaster’ at European Microfinance Week Opening,” http://www.microcapital.org/special-report-sanjay-sinha-of-m-cril-calls-overexuberant-growth-recipe-for-disaster-at-european-microfinance-week-opening/
November 14, 2012, “SPECIAL REPORT: European Microfinance Platform Remittances Action Group, GIZ, PHB Development Release Handbook: “Financial Literacy for Remittances and Diaspora Investments,” http://www.microcapital.org/special-report-european-microfinance-platform-remittances-action-group-giz-phb-development-release-handbook-financial-literacy-for-remittances-and-diaspora-investments/
December 2, 2012, “MICROCAPITAL BRIEF: Harbu Microfinance Institution of Ethiopia Receives Third European Microfinance Award At the European Investment Bank (EIB) in Luxembourg,” http://www.microcapital.org/microcapital-brief-harbu-microfinance-institution-of-ethiopia-receives-third-annual-%e2%80%9ceuropean-microfinance-award%e2%80%9d-at-the-european-investment-bank-eib-in-luxembourg/
MicroCapital Universe Profile: Alalay Sa Kaunlaran Incorporated (ASKI): http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Alalay+Sa+Kaunlaran%2C+Inc
MicroCapital Universe Profile: Kompanion Financial Group: http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Kompanion+Financial+Group+Microfinance+Closed+Joint+Stock+Company
Microfinance Information Exchange MIX Market Profile: Banco FIE: http://www.mixmarket.org/mfi/banco-fie
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