FINTECH for the Poorest of the Poor

How NWTF has committed to invest in technology to create a stable and robust FINTECH infrastructure for the poor.

Words by Presy Alba

NWTF—Negros Women for Tomorrow Foundation—is a microfinance non-goverment organization headquartered in Bacolod City, Negros Occidental. Founded in 1984 at the height of the sugar crisis to address the problem of poverty by enabling the women to harness their innate skills to earn a living to support their families, this non-profit NGO has quietly moved thousands of families out of poverty.

Now on its 36th year, NWTF was the one of the first microfinance replicators in the Philippines, adopting the Grameen method developed by Nobel Laureate, Professor Muhammad Yunus in Bangladesh in 1989. Its flagship microfinance program, PROJECT DUNGGANON now has 197 branches spread mostly across the rural parts of the islands of Negros, Cebu, Bohol, Leyte, Samar, Panay, and Palawan; and the Luzon Provinces of Laguna, Batangas, Albay, Quezon, Camarines Sur, Camarines Norte and Rizal, with plans to open 55 more branches this year.

Project Dungganon beneficiaries

How Microfinance Works

The Grameen method of microfinance organizes five unrelated women, ideally friends or neighbors, who could vouch for one another into one group. Before they are accepted into the program, the women must go through a short orientation where they are instructed on how the microfinance program works and what their rights and obligations are. This includes a workshop that helps them identify their marketable skills and decide on the business activity they can engage in using existing skills and talents.

The initial loan can be as small as a thousand up to five thousand pesos. Because they are not required to provide asset collateral, it is the group’s responsibility to make sure that each member pays their weekly installment. Ten groups make up a center, which meets once a week for about an hour to pay their weekly installment. The Center Meeting also serves as venue for knowledge sharing where the women share their stories and experiences, providing each other with moral support and encouragement. It is in these meetings that the women build strong bonds of community.

Project Dungannon follows the Grameen method of microfinance where women vouch for each other.

Innovations

Over the years, NWTF learned that providing access to financial assistance is really not enough to help the poor move out of poverty. One illness, one calamity—such as a typhoon, earthquake, or flood—can totally wipe out everything that the family has built over several years.

This is why, in addition to the usual micro loans for their business activities and access to micro-insurance, NWTF offers its clients low interest higher-education loans so their children could go to college. They can also avail of special loans so they could improve their houses, build sanitary toilets, and have safe water access and environment-friendly light sources and cookstoves. To improve the quality of life of its clients, NWTF also provides free non-financial services such as financial literacy, skills trainings, and capacitybuilding workshops. It conducts medical, surgical and dental missions with free medicine in all its branches, at least twice a year.

To protect the family unit, NWTF even organizes mass weddings for its clients, so they could legally name their spouse and children as the beneficiaries of their insurance policies.

In recent years, NWTF started to retain local doctors so that clients can have a medical check-up without waiting for the next medical mission. To help clients even further, NWTF partners with pharmacies and laboratories in the localities so that its clients could enjoy discounted rates.

The client’s family is also protected against huge funeral fees, as the clients can get a memorial package for themselves, saving the family from paying for expensive funeral services.

Project Kasanag

As Project Dungganon clients climb the economic ladder, they usually need more working capital for their growing business activities, with a longer payback period. These clients are graduated into Project Kasanag as individual borrowers. Under this project, clients can access bigger micro-loans while still enjoying the same non-financial services they had access to with Project Dungganon. Additionally, they now have access to Business Development Services for when they want to start formalizing and registering their business with government agencies such as the BIR, DOLE, DTI, SSS, and the like.

Project Dungganon beneficiary

Dungganon Bank Inc. — a microfinance rural bank

In 2005, NWTF realized that clients who expand their businesses would ultimately need mainstream banking services, and thus was born DBI—Dungganon Bank, a fully-owned subsidiary of NWTF.

Although DBI is only in two locations, at the head office in Bacolod City and Bantayan island in Cebu, its ATMs – automatic teller machines are located in many towns in Negros Occidental, Negros Oriental, and Iloilo where there are no ATMs in the town.

NWTF INTEGRATED SYSTEMS CORPORATION

The NWTF Integrated Systems Corporation was established to support the technology needs of both NWTF and DBI. As the technology arm of the NWTF group, it manages the network infrastructure that connects the branches to the head office in Bacolod where the main data center is located, and the back-up site in Cebu.

Project Dungganon beneficiaries

Software Development Team

It also has a dedicated team of software developers who custom-build solutions that enable the loan officers to be more efficient and more customercentric in their delivery of products and services to more than 500,000 clients.

Because of their in-depth understanding of the microfinance processes and constant communication with operations, the software development team is able to continuously innovate and improve the systems with agility and fast turnaround.

Dedicated Data Center

To sustainably provide world-class technology for its clients, NWTF built its own secure data center that is designed following international standards including raised floors, 7.5 ton precision air conditioning, 30KVA parallel UPS backed up by 400- and 250-KVA generators. The data center currently has 5 racks of servers, storage and network equipment. The servers are virtualized using VMWare, the world-standard for server-usage efficiency.

Secure Network Connectivity

The data center is connected to all branches using SD1 Software Defined Wide Area Network using Riverbed appliances, which assures more secure connection than regular VPN (Virtual Private Network) plus an enterprise Firewall for even higher network security.

ATM Switch

In addition, unlike other banks that outsource management of its ATM network to third party providers, NIS hosts DBI’s ATM Network including the Switch, HSM – Hardware Security Module, which securely encrypts data when connecting between ATM and the switch.

Disaster Recovery Site

As a failsafe, NWTF put up a remote disaster recovery site in Cebu. The backup site contains one rack of servers and network equipment containing backup servers, firewalls and redundant storage data for NWTF and DBI. It is protected from data loss due to power outage by a 3KVA UPS and is located in a secure building with 24/7 Generator. There is also a 24HR CCTV that is remotely monitored for added security.

USING TECHNOLOGY TO DELIVER SERVICES

To deliver the wide array of products and services to the clients, each loan officer is equipped with an android tablet with a long battery life. Because most centers are located in rural areas where there is usually no cellular signal, the custom-built software contained in the tablet is designed to work offline.

The tablet works as an all-in-one service delivery device.

1. ID CAPTURE. It is used to take the client’s photo and personal data so they could be issued their very first identification card. The Dungganon ID issued to them is then submitted to DBI so they could be issued their own ATM Debit Card.

2. PROGRESS OUT OF POVERTY TRACKER. The loan officer fills up the survey form for each client every time she takes out a new loan. Using the PPI (Progress Out of Poverty Index) for the Philippines, NWTF is able to track the client’s progress as she journeys out of poverty.

Project Dungganon beneficiaries

3. POVERTY MAPPING. Using Google Maps on the tablet, the loan officer is able to identify potential clients in the community as well as identify expansion areas within the locality. (Income-Generating Survival Skills) module, the loan officer is able to identify what products and services are best suited to the client and her family.

5. CLIENT LOAN APPLICATION. Filling the loan application directly into the loan officer tablet assures the client that her loan application immediately goes through the system and is processed and given proper attention by the loan officer. The result is proper loan evaluation with a faster approval turnaround, allowing the client to receive her loan on time.

The tablet also works as the center’s transaction registry, where all loans and payments are recorded and processed, and where each client’s profile is updated.

The data collected by the loan officer is automatically uploaded to the head office data center in Bacolod as soon as the loan officer returns to the branch. Each NWTF branch has a Wi-Fi access point that is connected to the internet either by wired DSL or LTE, depending on availability in the area. Using Riverbed VPN and switch appliances at both ends guarantees safe, secure, fast and stable data transfer.

When asked for feedback on the tablet, loan officer Rachel said: “The tablet has become an essential tool because it helps me perform my work better and faster. Everything I need is at my fingertips.”

The tablet also benefits the clients because it allows them to have all their needs addressed faster, as well as a source of information and learning.

For NWTF as a whole, the tablet makes for a seamless process from the front-end to the back-end, improving productivity and efficiency, reducing possible human errors as the data source is from the original data entry only.

Today, NWTF is known within the industry for its innovative and pioneering capabilities. Without much fanfare, it continues to improve not only its products and services that the poor need to take themselves out of poverty, but it is also committed to using technology to make financial inclusion a reality for those who do not have access to the mainstream economic ecology.

Project Dungganon center meeting