Dolores Torres, What is the Low-Bar and What is the High-Bar on Client Protection?

Dolores Torres, What is the Low-Bar and What is the High-Bar on Client Protection?

• 1.
  WHAT IS THELOW BAR AND HIGH BAR IN CLIENT PROTECTION! THE CASE OF CARD BANK Dolores M. Torres President and CEO CARD Bank, Inc. A Microfinance-oriented Rural Bank Philippines “Matatag na Bukas sa Bawat Pamilya”
• 2.
  Mission, Vision and Objectives • CARD Bank envisions building a sustainable financial institution owned, managed and controlled by the landless rural women by providing continued access to financial services to an expanding client base by organizing and empowering landless rural women and by instilling the values of discipline, hardwork and saving in an atmosphere of mutual respect. • Objectives – To provide banking services especially designed for landless rural workers by bringing bank services to community sites and accommodating the least financial transactions within their affordability. – To provide non-collateralized loans to non-bankable but viable projects; and – To ensure that 3 million poorest Filipinos are provided with financial services by the year 2015. “Matatag na Bukas sa Bawat Pamilya”
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  Historical Accomplishment 2005-2010 Outreach 600,000 496,301 500,000 36% 400,000 365,645 57% 300,000 Recognized Members 232,948 200,000 99% Percent Increase 117,195 100,000 122% 52,747 31,479 7% 68% - 2005 2006 2007 2008 2009 2010 “Matatag na Bukas sa Bawat Pamilya”
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  CARD Bank: Ata Glance Loan Outstanding (in USD$) Savings Deposits (in USD$) 60,000,000 54,924,646 60,000 50,000,000 44,487,493 50,000 48,883 40,000,000 40,000 31,181,007 23% 34,938 40% 43% 30,000,000 30,000 27,807 20,121,581 55% 26% 16,804 20,000,000 13,265,317 20,000 52% 12,185 65% 7,101,057 10,000,000 5,193,228 6,164 38% 87% 10,000 4,950 37% 25% 98% -7% - - 2005 2006 2007 2008 2009 2010 Sep-11 2005 2006 2007 2008 2009 2010 Sep-11 (10,000,000) (10,000) Loan Outstanding Percent Increase Savings Deposits Percent Increase Average Loan per Member (in USD$) Average Savings per Member (in USD$) 200 165 157 150 135 117 113 104 100 94 86 85 90 84 72 76 70 50 -100% -26% -11% -31% 5% -7% 19% - -70% -18% -16% -24% -1% 5% 5% 2005 2006 2007 2008 2009 2010 Sep-11 (50) Average Loans Per Member Percent Increase “Matatag na Bukas sa Bawat Pamilya” Average Savings Per Member Percent Increase
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  Commitment to ClientProtection 1. APPROPRIATE PRODUCT DESIGN- Products and delivery channels will be designed with the intent to provide value to clients. Providers will analyze the appropriateness of products with a high expectation that responsible use will not cause clients harm, and in particular will not lead to over-indebtedness. • At CARD Bank: – Products are designed and packaged based on market research done on the clients needs and preferences; – Loanable amounts and increments are designed in such away that clients will not be tempted to borrow too much; – Product mixture is also a product of market research and focus group discussions with clients and prospective clients in the covered areas; – Regular checking of ongoing business or businesses of the clients are done; – Member’s capacity to pay is evaluated and becomes the basis of loan approval; – Family members must approved the loan amount and must guarantee its payment as contained in the promissory note. “Matatag na Bukas sa Bawat Pamilya”
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  Commitment to ClientProtection 2. TRANSPARENCY • Providers will communicate clear, sufficient and timely information in a manner that clients can understand so that clients can make informed decisions. The need for transparent information on pricing, terms and conditions of products is highlighted. • At CARD Bank: – Effective Interest Rate (EIR), actual amount of interest to be paid and how much is due per week based on loan term chosen by the clients, a clause on clients’ permission to share information about her and the loans to accredited credit bureau are included in the Promissory Note that is written in local language that is understandable to the clients; – Repayment terms is also flexible based on clients capacity to pay; and – Clients are given a copy of the Promissory Note and amortization schedule upon loan disbursement. “Matatag na Bukas sa Bawat Pamilya”
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  Commitment to ClientProtection 3. RESPONSIBLE PRICING • Pricing, terms and conditions will be set in a way that is affordable to clients while allowing for financial institutions to be sustainable. Providers will strive to provide positive real returns on deposits. • At CARD Bank: – Returns are provided to clients through the following financial returns: • Interest on savings deposit is much higher than market; • Year-end rebate of interest to those clients who were able to pay their loans at 100% during the year; (last year 1%; this year 3%) • Clients who are stockholders of CARD Bank receive 8% dividends per year based on stockholdings; and • Depending on income performance of the bank, member- stockholders are also given rebates or refund of interest based on their stockholdings too (e.g. 2009 rebate of 12%; 2010; rebate of 16%). “Matatag na Bukas sa Bawat Pamilya”
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  Commitment to ClientProtection 3. RESPONSIBLE PRICING • Pricing, terms and conditions will be set in a way that is affordable to clients while allowing for financial institutions to be sustainable. Providers will strive to provide positive real returns on deposits. • At CARD Bank: – Returns are provided to clients through the following non-financial returns: • Health clinics with doctors and nurses; • Preferred providers program where clients get discounts for consultation; • CARD pharmacy that gives good discounts for clients buying generic medicines; • Credit with Education that is provided weekly containing topics on health, primary health care, business management, family planning, breast feeding, among others; • Scholarships for clients’ sons and daughters; • Scholarships for clients for high school and college; • Lakbay-aral/study tours for members; and • Leadership training for clients children. “Matatag na Bukas sa Bawat Pamilya”
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  Commitment to ClientProtection 4. RESPONSIBLE TREATMENT OF CLIENTS • Financial service providers and their agents will treat their clients fairly and respectfully. They will not discriminate. Providers will ensure adequate safeguards to detect and correct corruption as well as aggressive or abusive treatment by their staff and agents, particularly during the loan sales and debt collection processes. • At CARD Bank: – Qualified clients can buy shares of stocks and become owners of the MFIs; for example CARD MBA (the micro-insurance company, is 100% owned by the women clients; members owned more than 30% of CARD Bank; – Lakbay-aral/study tours (local and international) for stockholders; – Any abuse committed by staff on clients are appropriately punished; if it involves borrowing money from clients or withdrawing their savings for their personal benefits, staff are dismissed as soon as investigation has been completed and staff are proven guilty. “Matatag na Bukas sa Bawat Pamilya”
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  Commitment to ClientProtection 5. EFFECTIVE COMPLAINT RESOLUTION • Providers will have in place timely and responsive mechanisms for complaints and problem resolution for their clients and will use these mechanisms both to resolve individual problems and to improve their products and services. • At CARD Bank: – Regular monitoring at the weekly center meeting is being done by all managers including top management to ensure that voices of the clients especially complaints, issues and concerns are heard and acted upon quickly; – An almost 24/7 helpdesk has been installed and is being utilized by clients. To maximize utilization, client orientation about the help desk is being done in all CARD covered areas. Operation shall be 24/7 as soon as orientation with all staff has been completed. “Matatag na Bukas sa Bawat Pamilya”
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  Commitment to ClientProtection 6. PRIVACY OF CLIENT DATA • The privacy of individual client data will be respected in accordance with the laws and regulations of individual jurisdictions. Such data will only be used for the purposes specified at the time the information is collected or as permitted by law, unless otherwise agreed with the client. • At CARD Bank: – CARD fully complies with this principle in accordance with the banking regulation in the Philippines. – The promissory note contains a clause where clients agree for CARD to provide information to credit bureau or other lenders as it deem appropriate. “Matatag na Bukas sa Bawat Pamilya”
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  At CARD, weare all committed to really protect the interests of our clients to the fullest. It may not be the best protection commitment, but we are fully dedicated to make it work and deliver “A stable future for every Family”. Matatag na Bukas sa Bawat Pamilya! Thank you and Mabuhay! “Matatag na Bukas sa Bawat Pamilya”