Naomi Bureni, TLM Client

8/14/2019 Naomi Bureni, TLM Client

1/11

OPPORTUNITY INTERNATIONAL AUSTRALIA

Global Partnership Fund Progress ReportJulyDecember 2009

Naomi Bureni, TLM client


2/11

OPPORTUNITY INTERNATIONAL AUSTRALIA

Global Partnership Fund Progress ReportMessage from the CEO

When a woman receives a small loan, it is not simplya financial transaction. Its much more than that. Foreach client, the loan will represent somethingdifferent: for a young woman, it may be anopportunity to gain independence. For a mother, itmay be a chance to enrol her child in school. For a

grandmother, it may be a way to plan for herretirement.

For our clients, many of whom have enduredincredible hardship in their lives, a small loan is avote of confidence in their ability to forge their ownfuture. When a person has established a successfulsmall business and can do the things we take forgranted afford nutritious food, pay for anelectricity connection, send their children to school we see that microfinance does not just improvecash flow. It can also change peoples lives.

Opportunity International Australias work is onlymade possible through the generosity of our loyalsupporters. At December 2009, our partners in India,Indonesia and the Philippines were serving over twomillion clients. In 2010, we want to let more peopleknow about the life-changing impact ofmicrofinance in the lives of the poor. Yourcontinued support and advocacy will help us tocreate more awareness, harness more support andreach out to more people in desperate need of ahand up.

Thank you for your support of the inspiring men andwomen who are our clients.

Kind regards

Robert DunnChief Executive Officer

Report summary

India Opportunity Australias 14 microfinance

institution (MFI) partners are now serving over amillion clients.

Three MFI partners have been added to theportfolio, based in Orissa, Bihar and Bangalore.

Indonesia

Active clients have increased, with TLM nowserving over 16,000 people.

New training curriculums have been launchedfor Group clients, covering financialmanagement and entrepreneurship.

Philippines

In September and October 2009, typhoonsdevastated the northern Philippines. Ourpartners TSPI and ASKI led comprehensive reliefefforts.

The Philippines Renewal Program is guiding ourMFI partners in an intensive series of workshopsand activities, with new and improved productsscheduled to launch in 2010.

This report is an update on OpportunityInternational Australias programs from July toDecember 2009.

Ramvati and her husband run a thriving clay pot business in Delhi.Her most recent loan from Shikhar enabled her to purchase a clayoven, leading to increased productivity and income.


3/11

The journey out of poverty can involve many

setbacks. Perhaps no one understands this betterthan a grandmother called Muntaz Begum, living inthe town of Kurnool in the state of Andhra Pradesh,India. Muntaz never had the opportunity to go toschool and is illiterate.

At the age of 18, Muntaz and her husband started asmall bakery. The bakerys mud oven was in thesame room in which they slept and lived. Slowly, astheir family grew, the business also expanded.

Thirty-seven years and several small loans later,Muntazs bakery is a thriving business which

provides baked goods to over 200 shops in the localarea. The business is large enough to employ theirfive sons and daughters-in-law and provideeducation for their many grandchildren. In ahousehold of 25 people, there are plenty of mouthsto feed.

Despite the success of their business, Muntaz andher family found out how vulnerable their livelihoodwas when catastrophic floods swept through thetown of Kurnool in October 2009. Their house wasinundated with water, sweeping away possessionsand valuable machinery and filling the bakery with

mud.

Muntaz and her family were forced to temporarilymove out of Kurnool. For four months, they wereunable to operate their business. The family tried toearn a living by purchasing and selling baked goodsfrom local suppliers who had been less affected bythe floods.

A long-term client of Saadhana, the localmicrofinance institution (MFI), Muntaz took a loan ofRs. 70,000 (A$1,707) to help re-establish thebusiness. She rebuilt the oven and is planning to

purchase another piece of machinery to replacethose which were lost.

2 OPPORTUNITY INTERNATIONAL AUSTRALIAGlobal Partnership Fund Progress Report

In February this year, Muntaz and her family reopenedthe bakery. Without Saadhana, it would have beenvery different, Muntaz says. The family is workinghard to make up for the lost machinery. Before theflood, the bakery produced 7,000 items each day.Now, they can only produce 4,000. After costs, thefamily generates an income of Rs. 1,500 (A$37) a day.

The journey out of poverty is a long one, with manyobstacles. Microfinance can help people like Muntazprotect and increase their source of income, smoothout income fluctuations and increase resilience in the

face of unforeseen events, such as illness, death or anatural disaster.

On Muntazs street, collapsed homes and piles ofrubble are testament to the devastating impact of therecent floods. Inside, the bakery is a hive of activity asdough is kneaded, baking trays are filled and Muntazsgrandchildren play and eat fresh biscuits.

In the past, small loans enabled Muntaz and herhusband to build a small business which supports anentire extended family and is a cornerstone of thelocal economy. Now, another loan has helped the

family recover from disaster and begin again.Through her hard work and perseverance, Muntaz hasprovided her children and grandchildren with food,clothing and shelter. Shes also been able to givethem the gift of education, which she never had.

But according to Muntaz, her greatest achievement in37 years as a small business owner is this:

I am not dependent on anyone. I am self-sufficient.Even my children do not need to depend on anyone,she says proudly.

I am not dependent on anyone.

Saadhana became an Opportunity Australia partner inJanuary 2010.

Muntaz (centre) with her five daughters-in-law and three ofher grandchildren.

Muntaz Begum, grandmother and business owner.


4/11

One million clients.

Thats one million lives being impacted bymicrofinance, and one million families with hope fora brighter future.

Thanks to your support and the hard work of our MFIpartners, in less than two years OpportunityAustralias portfolio has become a significantnationwide poverty alleviation program.

India is a country of extreme contrasts: chronicpoverty exists alongside modern skyscrapers. Thereare also hundreds of millions of poor people whohave not benefited from Indias recent economicgrowth, and are unlikely to do so in the near future.

While the sheer scale of poverty can beoverwhelming, Opportunity Australias investmentapproach, allowing funds to be sent to andleveraged by partners all over India, allows you tohave a huge impact in the lives of the poor.Since its establishment in May 2008, OpportunityAustralias India Program has expanded to include 14MFI partners. Our partners are a mix of establishedand start-up MFIs, with a focus on the underserved

north of India.

Our Indian subsidiary, Dia Vikas Capital, activelymanages the program. Opportunity Australia andDia Vikas Capital provide ongoing guidance, assistthe MFI partners to establish relationships withbanks, and fund technical support from leadingconsultants MicroSave.

During a period of financial turmoil, when a lack offunds severely limited the operations of many MFIsin India, the generosity of our donors has allowed usto continue supporting our MFI partners. Now, asfinancial markets recover, our MFI partners are in aprime position for significant growth. Our supporthas been the crucial element, says Saneesh Singh,Executive Director of Investments and head of MFIpartner relationships at Dia Vikas Capital.

Ultimately, our work is about giving poor womenthe opportunity to use their ingenuity and hardwork to create a better future for their families.

One million clients is a milestone worth reflectingupon. In 2010, we aim to help our MFI partners togive a hand up out of poverty to another millionclients.

There are many opportunities to increase ourimpact: we hope you can continue with us on thisexciting journey.


Client and portfolio growth

Indiathe millionth milestone

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

Dec-07 Jun-08 Dec-08 Jun-09 Dec-09

60

80

100

120

140

160

180

200

220

240

260

Active Clients Outstanding Portfolio (A$)

Clients(thousands) P

ortfolio(A$m)

(including Opportunity Australias partners in India and Opportunity Internationals partners in Indonesia and the Philippines)


5/11

Indiaportfolio performance


Exchange rate used is A$1: Rs. 41.8816.This represents the client increase achieved since

Opportunity Australias investment in our new partners.*See definitions on page 9.

From July to December 2009, the portfolioincreased by over 150,000 clients.

In the past six months, Sharada has achievedremarkable growth, increasing branches from 46to 78.

Several MFI partners, particularly Arth, Shalomand Sambandh, have struggled to expand due todifficulties in securing bank funding. During thisperiod, Dia Vikas Capital has worked with the MFI

partners to improve their relationships withbanks. Indias financial year ends on 31 March, soaccess to bank funding is expected to improve inthe first three months of 2010. Arth has also usedthis consolidation period to focus on improvinginternal capacity and loan portfolio quality, withassistance from MicroSave.

Kaveri started operations in November 2009. Asthe MFI becomes more established, operationalsustainability will improve.

A Cashpor client at a group meeting.

MFI Clients at

31 Dec 09

Client

increasesince

Jun 09

Outstanding loan

portfolio as at31 Dec 09

(A$ 000)

No. of

branches

Operational

sustainability* %

PAR > 30

days* %

Established MFIs

1. Cashpor 362,880 42,022 49,974 267 106 0.6

2. Sharada 142,348 24,658 18,600 78 167 1.1

3. RGVN-CSP 88,096 17,829 10,840 62 126 3.5

4. Shalom 32,141 487 6,160 22 101 1.8

5. GO Finance 67,186 13,419 6,494 12 107 3.6

6. EMFIL 184,894 40,752 26,527 100 100 1.27. Adhikar 57,622 8,040 8,405 34 124 0.5

Start-up MFIs

8. Arth 11,339 -4,022 2,101 8 127 0.0

9. Samhita 26,398 1,019 2,626 28 97 2.3

10. Sambandh 4,142 333 621 4 77 0.0

11. Margdarshak 8,294 2,285 1,170 9 124 0.2

12. Shikhar 9,323 3,096 1,098 10 77 0.6

13. C-DOT 6,127 2,376 860 6 124 0.0

14. Kaveri 1,600 1,600 597 8 18 0.0

Partner totals 1,002,390 153,894 136,073 648 116% 1.3%


6/11


Indonesiareaching remote communitiesWest Timor is not a typical place for microfinance

to flourish: rural villages operate on largelycashless economies and livelihoods are oftendependant on a good harvest. However, TLMsclient-focused approach to providing clients witheffective service is now seeing more peoplebenefit from small loans.

From June to December 2009, TLMs activeborrowers increased by a third, from 12,270 to16,321.

Group trainingPreviously, TLM provided basic business training

to clients in short sessions during weekly groupmeetings. However, this training soon becamerepetitive for more experienced clients. TLMs newapproach is to provide training once a month togroups of about 60 clients who gather in a localchurch hall. This training covers financialmanagement, entrepreneurship and marketidentification. Eight branches have already hostedthe training, with the other 11 branchesscheduled for 2010.

Individual clients will be provided with trainingtailored to their businesses on a quarterly basis.

Alfonsius storyOutside his simple concrete house, Alfonsius Taifa ishammering old tyres into chairs, buckets and pots.Alfonsius innovative business supports his wife andfive childrenIdo, Ega, Medi, Icha and Atika, agedbetween two and 11. His family relies on him togenerate enough income to meet their daily needs.

After high school, Alfonsius worked for a printingcompany for seven years, which went bankrupt in

1999. Fortunately, he received severance pay whichhe used to set up his tyre recycling business.

Initially, Alfonsius worked very hard to market hisproducts door-to-door and gain new customers.Despite receiving many orders, Alfonsius hadinsufficient capital to meet demand. Then he becameill and could only afford the hospital fees with thehelp of a neighbour.

In 2009, Alfonsius heard about TLM. He received aloan of Rp. 750,000 (A$89) which he used to buy rawmaterials and equipment. He buys the tyres from

repair shops at Rp. 2,500-5,000 (A$0.30-0.60) each.Alfonsius has been able to expand his business and,with his wifes help, meet the demand for theincreasing number of orders.

Prior to joining TLM, Alfonsius earned approximatelyRp. 50,000-75,000 (A$6-9) a day. Now, his daily incomehas tripled to Rp. 150,000-200,000 ($A18-24). Alfonsiuscan now support his family and save for his childrenseducation. His greatest dream is to purchase a house,as he is currently renting.

Alfonsius hopes to further expand the business and

employ people to sell his products. Through hiscreativity and hard work, Alfonsius has used TLMssupport to create a brighter future for his family.

Alfonsius with one of his chairs made out of discarded tyres.

Active clients include all TLM Group and Individualclients.

Exchange rate used is A$1: Rp. 8,400In 2009, TLM focused on serving Group rather thanIndividual clients, resulting in a decreasing average loansize across all products.TLM has implemented a series of controls to addressportfolio at risk, including a more comprehensive loanapplication and a systematic process to deal with laterepayments. As a result, portfolio at risk has decreased.Loans to women in West Timor are often signed by thehusband, hence the statistic for loans to women islower than the actual.New regulations in Indonesia mean the Governmentwill tax Foundations (like TLM) if they exceed 100%operational sustainability. To address this, TLM isreinvesting additional income in community projects.

TLM performance indicators Jun 2009 Dec 2009Active clients 12,270 16,321

Branches 19 19

Average loan size A$ 306 264

Portfolio (funds with clients) A$ 3,000,783 3,389,363

Portfolio at risk (PAR) > 30 days 11.62% 4.34%

Percentage of loans to women 46% 53%

Operational sustainability 114% 100%


7/11

The Philippinesrenewing operations


The Philippines Renewal Program is helping our MFI

partners, ASKI, TSKI and TSPI, to provide flexible,effective microfinance in poor communities.

Expert technical consultancy MicroSave has workedintensively with our partners staff, equipping alllevels of the organisation, from loan officers tosenior managers, with the capability to bring a newgeneration of microfinance products to their clients.

ASKI has focused on bridging the gap betweenGroup and Individual loans, while TSPI hasdeveloped a new Individual loan to provideimproved opportunities to entrepreneurs (see

Veronicas story on right). TSKI is currently pilotingan exciting new Group Loan.

TSKIa new approach to Group Loans

TSKI has designed an innovative group product,Dagyaw, which has been well received by clientsand staff.

The Dagyaw loan has the following features: No group co-guaranteetwo clients co-

guarantee each others loans Improved processes, including quicker loan

disbursement Loans range in size from Php. 5,000-30,000

(A$122-732) Loan term is six months Weekly repayment at brief group meetings with

20-45 clients Loan is disbursed in cash at the branch office,

saving clients time as they dont have to travel tothe bank to cash a cheque

The Dagyaw pilot commenced in June 2009 in theprovince of Negros Occidental. Loan officersbenefited from intensive training prior to the pilotlaunch, which equipped them with the skills andknowledge to market and implement the loaneffectively.

The pilot has been well received by clients, withclient targets exceeded and a 100% repayment ratemaintained.

If the pilot continues to be successful, this productmay be replicated among many of OpportunityAustralias partners in the Philippines.

Veronicas storyDriven by a passion to produce high-quality goodsand support her family, Veronica Monfero is theowner of a successful shellcrafts business.

Thirteen years ago, Veronica and her husbandstarted their business with a capital investment ofPhp. 1,000 (A$24). Gradually their shellcraftsmanufacturing business grew, generating a grossannual income of Php. 30,000 (A$732). The Monferosknew if they had access to additional capital, theycould increase their product range and employmore people.

Veronica heard about TSPI from her neighbours andtook the opportunity to apply for a small loan. Nowon her eighth loan cycle, her business generates agross annual income of Php. 100,000 (A$2,439).Veronica now supplies a market district in Manilaand four exporters.

With an excellent repayment record, Veronica waseligible to join TSPIs Maunlad Progressive loan pilot.A loan of Php. 100,000 (A$2,439) enabled Veronica topurchase extra materials and implement productdesign ideas for Christmas ornaments.

Veronica is also involved in TSPIs Kingdom BuildersMentoring Program, which connects clients withexperienced business owners to assist with strategyand business development goals. Veronica plans todevelop an improved marketing strategy andproduct brochure.

Veronica is thrilled to be part of the loan pilot. I can

grow my business even more and help my workerssince I consider the business not just for my ownbenefit, she says.

TSPI client Veronica making her unique shellcrafts (left) and acompleted Christmas lantern (right).

Alalay Sa Kanularan, Inc. (ASKI), Taytay Sa Kauswagan, Inc.(TSKI) and Tulay Sa Pag-unlad, Inc. (TSPI).


8/11

ASKI Community GroupsIn the northern Philippines where ASKI operates,many people live in rural communities whereopportunities for employment are scarce. Villagersoften work as farm labourers or move to cities oroverseas to earn enough to support their families athome.

In the second half of 2009, 1,362 clients formed 126groups. The average initial loan was Php. 5,000(A$122), while the most common businesses weresari-sari (variety) stores, vegetable selling and pigraising.

In the same period, ASKI established four newbranches in Aparri, Bambang, Caburraguis andRosales. Aparri is a seaside town located on the farnorth coast of Luzon island, while the otherbranches are located inland. These new brancheswill allow ASKI to bring their community-focusedmicrofinance to more people.

Culinary courseA 40-foot container van is bringing expert cookingclasses to ASKI clients around Luzon island.Accredited by the Philippines Governments

Technical Education and Skills DevelopmentAuthority, the Kaalaman Sa Kusina Karavan hasalready provided 70 people with training in Hot andCold Kitchen skills, pastry making and baking.

The Philippinesrenewing operations


The three-week course was designed for ASKI clients

who cannot afford formal training courses. Thetraining provides ASKI clients and relatives with skillswhich can be used in their own small businesses orin employment. At the end of the course,participants undergo a written and practicalassessment and receive a Certification ofCompetency from TESDA.

Farmers cooperativeFor small-scale farmers in the Philippines, one of thechallenges of earning a steady income is dealingwith fluctuating market demand. Months can bespent cultivating a crop, only to find there are

virtually no buyers following harvest. Working as acollective can give farmers bargaining power andincome security.

A group of 30 onion farmers in Nueva Ecija wereselected by a food corporation to become majorproduce suppliers. However, they lacked capital toscale up their operations. ASKI loaned the group offarmers Php. 870,000 (A$21,220) to allow them totake advantage of the food corporations offer. Now,30 farmers and their families are earning stableincomes.

ASKI clients participate in the cooking course at Talavera.

Elvira Beniosa, ASKI client and sari-sari (variety) store owner.She used her loan to purchase extra stock for her store, whichhas attracted more clients and increased her income.

ASKI performance indicators Jun 2009 Dec 2009Active clients 58,053 59,795Branches 21 25Average first loan size A$ 218 212Portfolio (funds with clients) A$ 10,121,847 10,862,353Portfolio at risk (PAR) > 30 days 6.8% 4.8%Percentage of loans to women 79% 80%Operational sustainability 111% 108%

Exchange rate used is A$1: Php. 41. This figure includes allIndividual and Group clients on their first loan cycles.Group Loans are usually smaller.


9/11

On 26 September 2009, Typhoon Ondoy hit the

Philippines. After 12 hours of torrential rain andlocalised flooding, people began to rebuild theirhomes. However, Typhoon Pepeng soon followedwith greater intensity. From 3 to 9 October, TyphoonPepeng followed an irregular path, crossing overCentral and Northern Luzon three times. Rainfallexceeded 1,000mm in some areas, with winds of upto 230km/hr.

Approximately 9.3 million people were severelyaffected by the typhoons, out of an estimatedpopulation of 43.2 million living in the region. Over950 people died and many more were injured.

Approximately 56,000 TSPI clients and 6,000 ASKIclients were directly affected. Sadly, one ASKI client in

Talavera lost her life in the floods. Many clientshomes and belongings were washed away.

ASKIs newly established Rosales branch had justopened its doors in September when the typhoonhit. The ground floor of the office was flooded.Branch staff acted quickly to move all computers andimportant equipment to the second floor of thebuilding.

Following the typhoon, the MFIs mobilised resources(including emergency donations from supporters ofOpportunity Australia and other OpportunityInternational partners across the world) to run reliefoperations, with staff distributing goods, includingfood, clothing and mattresses, to affected

communities.

Our MFI partners recognise that affected clients needongoing support. ASKI implemented a rehabilitationplan, including an evaluation of affected clients todetermine the extent of damage and a moratorium

on their loan repayments. Some client loans havebeen restructured and refinanced.

Sources: ASKI, Philippines Development Forum, TSPI


The Philippinesresponding to disaster

TSPI is really exceptional. You are moreconcerned with the people than makingprofit.

Leonila AlmodovarTSPI client, Malolos

We didnt mind getting wet, tired orhungry, just to make them feel that

they are not alone.Mary Grace Cacho

ASKI bookkeeper, on helping in the relief efforts

ASKI CEO Rolando Victoria assisting in the relief operations.

Aileens storyI decided to keep calm despite the bad weathercondition. I was worrying too much that my piggerymight be affected. I prayed hard that my brother,who is taking care of my piggery, wont be harmed.

Unfortunately, my piggery was one of thedevastated belongings affected by the typhoon.

Even my [fattest pig] died because my brother wasnot able to save them, but I am glad that he [mybrother] is alive and nothing happened to him.

I realised how lucky we were that we are still alivetoday. Despite what happened, we still survived. Irealised that I must move forward and continuewith my life I am very much thankful that ASKIextended their help.

Aileen NarajosASKI client, San Jose Patag

Ongoing flooding made relief efforts difficult.


10/11


11/11

1. Invest in the future of microfinanceBecome an Opportunity Investor and walkalongside Opportunity Australia as we implementand improve services to the working poor in India,Indonesia and the Philippines.

Invest in InnovationSupport OpportunityAustralias Social Performance Management program.$25,000 delivers expert consultants and practicaltools to provide more people with betteropportunities.

2. Sponsor clients in their journey outof poverty.You can sponsor 25-50 microfinance clients for$10,000. These clients will start or expand their ownsmall businesses and in doing so, bring hope to theircommunities. You can choose to support clients inIndia, Indonesia or the Philippines with life-changing loans.

3. Support the people who make

microfinance workWalking with TLM - Our partner TLM is building itscapacity to provide flexible, innovative financialservices and training to poor people in West Timor.

Philippines Renewal Program -Three microfinanceinstitutions and long-term partners of OpportunityAustralia, ASKI, TSKI and TSPI, are transforming intodynamic organisations equipped to achieve greatersocial impact now and in the future. AusAID willmatch each dollar you donate, doubling your impact.

How do you want to

change lives?

Thank you for your generous support.

Opportunity Australia needs your help to expandour community of supporters and continuechanging lives in India, Indonesia and thePhilippines. We would like to connect with morepeople like you.

Sharing your report with family, friends andcolleagues is an easy way to increase the impact ofyour commitment. You can inspire others to join uson the journey as we give a hand up to those livingin poverty.

To discuss how you might share your journey withothers, contact your local Donor Relations Manageror contact us on [email protected] 812 164.

More exciting opportunities tosupport clients and their families arecoming soon.

Share the journey

Microfinance can help parents give their children a chance ata brighter future.

Your support can provide the poor with enough capital to kick

start their businesses and work their way out of poverty.

Be the change you want to seein the world.

Mahatma Gandhi

X9999ED0310

Documents

Naomi Bureni, TLM Client