KMBI 2016 Annual Report

ANNUAL REPORT

Kabalikat para sa Maunlad na Buhay Inc.

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Table of

CONTENTS Page 2

Editorial Board

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Corporate Ideals

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Message of the Chairman

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Message of the President

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30 Years Journey

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History Highlights

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The Product of Transformation - Maricel Panayas

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Undying Faithfulness - Arlyn Talamor

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When Push Comes to Shove - Maternidad Salili

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Commited to the Ministry - Gamelba Sanoy

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Organizational Performance

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Year-In Review

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Products and Services

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Steering the wheel - Executive Management Office

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Turning the lives 180 degrees - Client Services Group

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Cutting through rocks - Credit Operations Group

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Paradigm of continous improvement - Management Services Group

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Transformation beyond households - KMBI Development Foundation, Inc.

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Board of Trustees

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Audited Financial Statements

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Where We Serve

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Partners and Affiliation

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Annual Report 2016

Editorial

Board Princes O. Dacca Editor-in-Chief

Margaret Rose N. Rodriguez Managing Director

John David I. Ulangca Art Director

Kenneth S. David

Associate Editor/ Writer For subcriptions and inquiries, please contact: The Corporate Affairs Office 12 San Francisco Street, Karuhatan, Valenzuela City Metro Manila 1441 http://www.kmbi.org.ph

The Board of Trustees and Management would like to thank all support and branch staff for their contribution in bringing this report into fruition.

Philippine Copyright 2017 by Kabalikat para sa Maunlad na Buhay, Inc. All rights reserved.

CORPORATE IDEALS OUR VISION To see people in communities live in abundance with strengthened faith in God and in right relationship with their fellowmen and the rest of creation.

OUR MISSION KMBI is a Christ-centered development organization existing to advocate and work for the integral transformation of the lives of its clients and their communities, by providing sustainable microfinance and responsive nonfinancial services.

CORE VALUES Christian Faith People’s Well-Being Good Governance Continuous Improvement Teamwork

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Message of the

CHAIRMAN KMBI has unfailingly proven to be a lot more than a mere source of credit for the entrepreneurial poor. In 2016, we have kept the trend upward and provided more of our non-financial services. This mirrored our strong adherence to our 30th year motto: “30 years of God’s faithfulness in serving the poor.” Indeed, God has been faithful to us and to the communities we serve as we stand tall and keep our banner tucked within the competitive realm of microfinance.

We continue to devise more affordable and accessible products for the micro, small and medium-sized businesses to achieve breakthroughs. Our business of transformation has progressed remarkably throughout the country. New products and services, creative partnerships, innovative business models as well as initiatives for the Program Members’ needs are all being embraced by KMBI to close gaps and better enable financial inclusion.

To keep ourselves anchored on our mission and vision, we have reviewed the second year of our “Paghandom sa Damlag: Vision 2020” five-year Business Plan to keep our yearly targets and commitments in check. This ensures that we do not plan activities and engagements out of place.

We had faced turbulent moments in 2014. But two years later, our operations have been stabilized. In fact, we have managed to boost our financial stance in 2016, a sign of our communal hard work and steadfast dedication to remain true to our mission.

I am heartened to witness the optimistic rate at which we have already recovered; our staff have become more efficient, and all groups have been functioning with a bigger heart for service. If this continues—and I am certain it will—then we will be able to achieve our strategic goals in half the time we initially envisioned. As we continue expanding both in manpower and outreach, we will soon witness the rise of newer programs tailored for non-clients as well. We will need to double the effort to make this possible, but we must motivate ourselves with the gentle reminder that we all do this for the purpose of accomplishing our God-given mission.

With growing demands for manpower and the necessity to catch up with the needs of our clients, we are faced with a bigger responsibility of capacitating our staff. This is why we put in place measures such as empowerment and capacity building activities to add more knowledge to our staff and develop their aptitude for leadership. By nourishing the intellectual and psychosocial needs of employees, we equip them in a way that enables them to radiate their aligned beliefs to produce a positive impact on the society.

A new phase of our journey is about to begin—a journey of KMBI made stronger through God’s perfect time!

David D. Guttierez Chairman and Vice-President

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Annual Report 2016

A new phase of our journey is about to begin—a journey of KMBI made stronger through God’s perfect time!

David D. Gutierrez Chairman and Vice-President

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Number 30 signals the beginning of great things... it is an indication of maturity and ripeness to take on bigger leadership roles.

Eduardo C. Jimenez President and Vice-Chairman

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Message of the

PRESIDENT There is something enthralling about the number thirty. If we look at a Biblical perspective, number 30 signals the beginning of great things. For one, Christ started His ministry at age 30. Likewise, priests enter their service when they reached 30. It is said that when one hits three decades, it is an indication of maturity and ripeness to take on bigger leadership roles.

Let us then take a look from where we are right now. KMBI now celebrates its 30th Pearl anniversary. Tracing back the times we had spent together in continuing what has been started would reveal how far we have come. From the four corners of a choir room in Valenzuela City, we now operate in areas we could only once dream of reaching. This translates to widened access to poor communities to initiate our transformative services.

We are once again reinforced with God’s purpose, and His testament should be more than enough to refuel our desire to continue servicing the underserved parts of society.

We are underlined by the belief that it is by His sustaining grace that we are able to stay the course and keep our foundations sturdy, amidst the raging struggles we have been through in the past years.

It also makes sense why the number 30 is associated with a lustrous underwater gem, the pearl. Pearls undergo a long process of formation, which can bear striking resemblance to how much wisdom we have acquired in our three decades of service. The bitter experiences we had faced in the past have taught us to be more introspective and constantly revisit the foundation we are grounded on, so that we may not deviate from the path the Lord has prepared for all of us. The same experiences made us more resilient and unified, and we will use them to move forward and build a better future for our staff and Program Members with the unfailing guidance of God. We can say with confidence that 2016 has been a victorious year for KMBI. From the resounding success of the back-to-back MicroEntrepreneurs’ Summit and LEaD Camp 2016, both clients and staff have developed a renewed vision of what KMBI does to the lives of the poor, which greatly helped in realigning their personal goals to those of servantleaders. We can look forward to seeing more of these activities that will inculcate firmer trust and stronger bond between KMBI and all of its stakeholders. These endeavours are big leap towards unifying our minds into one KMBI vision— To see people in communities live in abundance with strengthened faith in God and in right relationship with their fellowmen and the rest of creation.

We would also like to recognize the Credit Operations Group for taking good care of our Program Members and for strictly adhering to the values of the organization. The operations team is consistently doing an excellent job at bridging the poverty gap through efficient delivery of our financial and non-financial services to clients.

The same credit goes to the Client Services Group for innovating ingenious ways of making our programs attainable and convenient to our Program Members. We are delighted to have seen the hands-on efforts of the CSG in pushing through the nationwide rollout of the Unilever Pureit Loan Program. This is yet another testament of our commitment to give our clients the best kind of products they can get.

Similarly, we are in awe of the Management Services Group for working around the clock to give the staff their much-needed sustenance and equip them with the capacity to render healthier customer service to our Program Members.

What is thrilling about this year is the birth of KMBI’s new community-building and advocacy arm, the KMBI Development Foundation, Inc (KDFI). This echoes our pledge to extend our outreach beyond our Program Members. KMBI’s mission does not stop at poor enterprising women; we aim to broaden the compass of our beneficiaries to support more people in need of our services.

Looking at how well we have been performing since 2014, I am fully convinced the past is now far behind, and the future is right in front of us. Let us always remind ourselves not to dwell on what had transpired, but rather look forward to many more exciting years ahead.

As King Solomon said in Proverbs 4:25: “Let your eyes look directly forward, and your gaze be straight before you. Ponder the path of your feet: then all your ways will be sure.”

Much has changed over the past 30 years – in our policies, systems and procedures. But two things will always be sure – we will remain dedicated and committed to our vision and mission as a Christ-centered Microfinance NGO, and the best is yet to come in Christ!

Eduardo C. Jimenez President and Vice-Chairman

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30 YEARS JOURNEY

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30 Years

JOURNEY “Wisdom acquired through experience” is an appropriate allegory when we talk about pearl. It is often associated with the 30th anniversary celebration, because to develop such a lustrous piece of wonder is a tedious, repetitive process that takes several years to complete. As KMBI writes its name on the 30th year milestone, it holds up a piece of pearl not as an emblem of longevity, but as a bright manifestation of three decades of rich history, like bountiful treasures underneath the sea.

The formation of a pearl begins when a microscopic irritant enters the mollusk’s shell and tries to infiltrate its mantle tissue. As a reaction, the mollusk kicks off its defense mechanism by secreting layers of “nacre,” a mixture of calcium carbonate and conchiolin, to seal off the harmful microorganism. Over the years, the mollusk’s mantle will repeat the process of secretion, layer over layer, until it thickens and finally takes shape into what we call a pearl.

“KMBI is on its most crucial stage, for 2016 serves as a preparatory year in which every step has to be taken with prudence.”

Last 2015, KMBI had a breathing room to establish a strong foundation anchored on: (1) Christ; (2) its corporate identity; and (3) healthy relationships. These gave birth to the “Paghandom sa Damlag: Vision 2020” five-year Business Plan. It sought to factor in not only the number-crunching data of its financial and operational performance on the rise, but it also analyzed the impact and legacy the organization will leave in the hearts of all of its stakeholders. This 2016, stability is now in place, allowing for a constant and smooth forward motion. And now that KMBI stands on solid ground, it is set to run at full speed.

KMBI is on its most crucial stage, for 2016 serves as a preparatory year in which every step has to be taken with prudence. The organization is prepping up towards the future by equipping staff and Program Members with readiness to face the years ahead and leave behind all traces of the past.

KMBI does not stop learning; in fact, it uses past experiences to feed its desire for development. It has learned to correct its previous missteps to better serve the needs of its Program Members who are the major stakeholders of the organization. Why not just leave history as it is—irreversible and permanent—and shift our focus on something good that can be further shaped into something better: the future?

Strike while the iron is hot, as the classic adage goes. Now is the perfect opportunity for KMBI to take huge leaps and decide on what kind of future it will create. Just by looking at the Program Members and staff who are both laden with a need for inclusive development, KMBI cannot afford to compromise the future and lead a vicious repetition of history. And with more untrodden lands, KMBI knows there are a lot more communities out there that need to be touched with the services they need and deserve. The organization will continue to exist so long as there is a need to transform the lives of poor Filipinos.

To get to the destination, one has to keep moving forward. With its core value of Christian faith coming to play, KMBI looks to the Word of God as its navigator. In the verse of Proverbs 4:25-27 it says, “Let your eyes look straight ahead; fix your gaze directly before you. Give careful thought to the paths of your feet and be steadfast in your ways. Do not turn to the right or to the left; keep your foot from evil.”

Focus on the goal Are we looking at our mission, or are we looking at achieving something else at the same time? If we want to go somewhere, we look straight into our direction. Lack of focus will cause us to bump into a random object or trip along the way. When we set our eyes on our end goal, we have to commit ourselves to it, no matter how distant it might seem. This is especially true when we choose to walk on the path of Christ. We have to follow all of His teachings, bar none. We do not just selectively look at the commands we find convenient.

“In a world where mission drift is extremely common among faith-based institutions, KMBI remains true to its commitment of helping the poor and developing their values.”

Give careful thought to your paths Every organization exists because it is formed by a quintessential groundwork—its mission. In the case of KMBI, it exists to advocate and work for the integral transformation of the lives of its clients and their communities, by providing sustainable microfinance and responsive non-financial services.

To achieve this, careful decisions must be taken at every step. This is why the Board of Trustees strive to thoroughly examine all organizational decisions and policies, as they

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are crucial in keeping the organization on its feet. The same decisions do not only affect the individual involved in the process; they also have an impact on all staff and clients.

KMBI vows to take the right steps anchored on Christ, its corporate identity, and healthy relationships. These tenets will serve as the blueprint that will guide KMBI on its decisionmaking process in the next five years.

Be steadfast The key to keeping the organization afloat is consistency. In a world where mission drift is extremely common among faith-based institutions, KMBI remains true to its commitment of helping the poor and developing their values. It is the force that drives the organization to exist and continue existing beyond its 30th year of service. KMBI’s three decades of existence can also be attributed to the unwavering trust and support from its staff. They wholeheartedly believe in KMBI’s ability to facilitate transformation in the lives of its Program Members. The organization seeks to be consistent in upping the standards of living of the people in underdeveloped communities.

Keep your foot from evil Predicaments come every now and then. These difficulties either test the oneness of the organization or elicit a fragmentation of beliefs if the foundation is not strong enough.

In the face of unpleasant circumstances, KMBI stood undaunted. It has proven time and time again that it is the Lord who helps the organization stay on its feet in the presence of harm.

One cannot deny that KMBI has been through a lot. We offered toasts in times of celebration. We held arms tightly when fear was imminent. We prayed for one another during our brittle points. We cackled at the recollection of amusing memories. We lent our ears to our Program Members when they had no one to share their grievances with. We offered our voices to God as we sang for worship. We intently listened when somebody shared his or her testimonies of faith.

These experiences, when gathered and stitched together, make up the many layers of a pearl that is KMBI. Three decades were all it took for the organization to form this rare wisdom. But remember that this little piece of gem, seemingly flawless and lustrous, would not even materialize without an irritant in it. This tells of the timeless beauty of wisdom—it would never be cultivated without past mistakes.

The formation of a pearl is just the beginning of a wiser KMBI, shining bright into the future ahead.

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30th Anniversary

HIGHLIGHTS

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The Product of Transformation

Maricel Panayas

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Client

SUCCESS The definition of family is not only restricted to blood relation. The meaning can also be sought within a culture that values inclusion, unity, and solidarity. And one important constituent of every family is a child, which Maricel Panayas of Cotabato likes to brand herself in her journey—a ‘proud daughter of KMBI.’ Her humble declaration stems from the transformed life she has during her 12 years of devoted program membership with KMBI. Making a living off from coconut in Davao del Sur back then, she and her husband were gaining scarcely from the business, prompting the latter to look for other source of livelihood. When her husband found his luck as a rice porter in M’lang, North Cotabato, they were left with no choice but to settle in the new place and start afresh, carrying their hopes with them.

Fortune was too steep an incline when they arrived in M’lang. With no permanent settlement or any relative nearby, they rented out a small nipa hut devoid of electricity.

“There were times we were left to eat burnt rice every day,” she recalled. Determined to put an end to their painful beginning, she explored various means to help out her husband in sustaining their family. Maricel managed to rake in small profits by doing various pinkcollar jobs, such as manicure, laundry, pantry works, and housekeeping. Those interim vocations generated sufficient income in the beginning; however, with growing children, she found herself in dire need to muddle through the coming days.

It took her courage and faith to try her luck in a microfinance organization to get the capital required to establish a variety store. Unfortunately, she was denied of loan access merely because she was “an informal settler.” Despite this, she did not let dismay diminish her tenacity to give her family a better life and future. But this came at a great cost—she lost the time to tend to her young children. She related, “Sometimes, when I would leave our abode, my youngest was left under the care of my eldest child.”

Winds had changed in 2004 when a Program Officer knocked on her doors and invited her to join KMBI. To her delight, she volunteered to form her own center which she currently presides. “In my whole life, this is the first time I have experienced being a Center President,” she enthused. She invested her initial PhP 4,000 on her sari-sari store business. Then she

was able to diversify her business through strategic planning and proper allocation of resources.

Opportunities kept pouring in Maricel’s life. In 2012, their municipality mounted a Digital Literacy Program for the Housewife. “I learnt to develop and hone my confidence during my years of program membership with KMBI,” she related. And her self-confidence brought her the Digital Literacy Model, besting representatives from 35 different countries. She looked back and thanked KMBI for giving her opportunities that nourished her selfconfidence.

She eventually saved enough money to purchase and renovate the house they had rented for years. She was also able to invest on a vehicle and a lot in a nearby area. On top of this, her sari-sari store, which she used to call ‘sira-sira’ store, has now scaled up to a mini-grocery store. Her eldest child had already finished studies and is now part of the nation’s workforce. Maricel gave livelihood for her second child, while the remaining two are underway in their studies.

Maricel, unashamed of professing her daughterhood with KMBI, no longer has to borrow money, as she can now fully sustain the needs of her family. Nevertheless, she will stick around as a Program Member of KMBI, a mark of her loyalty to the organization. “This is where I sought change,” she expressed. She was grateful to a microfinance organization like KMBI that exists not only to offer finances, but also to outfit Program Members with spiritual values that will ultimately help them transform their own lives. One message she wanted to impart to other clients is to ‘look for a microfinance organization that has a genuine intention of helping and does not choose whom to serve.’

KMBI is permanently written in her heart. She is willing to keep the chain of transformation going by passing it to those in need, in much the same way KMBI has done a complete makeover in her life. Maricel hopes that KMBI will never cease on its mission of transforming lives, as she herself has already committed her lifetime support to the organization.

“I will stay here for as long as I have breath,” she declared.

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Client

SUCCESS

“It was the peak of the tug of war between centers here in Magdum, Tagum. I was being persuaded to join KMBI-PCO. My former Program Unit Head was even presenting me derogatory videos against KMBI Head Office to justify the argument. There used to be eight centers here in Magdum; seven of them sided with PCO. They would persistently come back every once in a while to convince me to go with them...” Arlyn Talamor narrated as she recounted her experiences during the 2014 dispute.

Confusion and uncertainty enveloped those times. Arlyn had to walk a tightrope: a test of her belief, loyalty, and integrity. These three values were also the grounds that led her to be hailed as the Loyalty Awardee during the 2016 MicroEntrepreneurs’ Summit.

A sense of rationality was natural for Arlyn Talamor. But this seemingly simple way of thinking came to be one of the greatest decisions she had made as a KMBI Program Member. She committed to give back the loan she was entrusted to the original Tagum Branch in Suarez Plaza Building, because she knew that was where she had acquired the loan. She figured it was the right thing to do at the time. As early as 2003, she had already shown consistency in repaying her loans and abiding by the policies of the organization.

Her sari-sari store and eatery were nothing out of the ordinary then. To supplement their income, she thought of putting up a banana trade business. She would purchase banana produce from nearby farms and sell it to Cardava Banana Processing Plant. Coupled with the loan she acquired from KMBI, she managed to mobilize her income. Apart from financial benefits, she also reaped the spirit of leadership in running a center. One

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apparent characteristic of Arlyn is her steadfast persistence, which allowed her to support the education of her two children until they finished their studies. She also accumulated enough money to invest in a lot, room rentals, and piggery.

Her dedicated efforts to maintain the orderliness of her center have paid off. During the celebration of KMBI’s 30th anniversary, she was recognized as one of the 30 outstanding clients in the loyalty category. The award was bestowed to her during the 2016 ME Summit as a token of gratitude for her faithfulness to KMBI. “I could not contain the overwhelming joy I felt when they handed me the award. For the first time in my life, I was given a plaque of recognition. It was a beautifully strange feeling, as it is visible to people. While cash is also a nice thing to receive, it cannot be stored on a shelf, unlike the plaque,” she quipped.

She noted that more than the award, her youngest child who is taking up Pharmacy was granted PUH scholarship. Arlyn continues to patronize KMBI as a way of supporting the organization’s advocacy. She is also happy about the peace of mind provided by the microinsurance.

Arlyn’s loyalty to KMBI became a source of inspiration to her former co-Program Members.

Arlyn remains hopeful that more and more of her estranged fellows will soon come back home. It is one of her proudest feats to have made the ultimate decision of staying faithful in times of confusion.

Undying Faithfulness Arlyn Talamor

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When Push Comes to Shove

Maternidad Salili

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Client

SUCCESS One remarkable characteristic of a spring is resiliency or the ability to return to its original state no matter how heavy the force.

using protective coating. She even went from Mindanao to Manila to source out better quality raw materials.

Just like Maternidad Salili of Mindanao and her business. Born of a poor family, she aimed of having a better quality of life for her and her family when she got married and had kids of her own. It was in 1979 when they established the business of producing coil springs that are being used in vehicles and machineries. When 2001 dawned, it signaled the start of her calvary—the passing away of her husband. This heavy force pinned down their business.

Athough her two children could not finish their studies, they got to learn how to work with practicality. “I taught them how to deliver spring, do collection, and other important how-tos. Soon they found it fun and worthwhile.”

Despite the bitter loss, Maternidad remained unfazed in moving forward. She continued the coil spring business, because it was the only way she knew that will meet the needs of her family. “He [my husband] told me to keep running the business for the future of our children,” she told.

Maternidad admitted it was a tough challenge to keep the business going. “At first it was difficult to pull through the downward direction of our business, especially because I wasn’t much knowledgeable about measurements. But eventually I got the hang of it,” she shared.

Today, Maternidad touts around half a million worth of business assets and contracts with big industrial companies like Coca-Cola Philippines. She dreams someday to see her products in mainstream outlets like Ace Hardware.

Another legacy her husband left, apart from the coil spring business, was wisdom. “I’m happy I got to put into practice the lessons I learned from my husband. By doing a thorough review of the measurements he had provided, I could apply them and still use them to my advantage up until now. It humbles me to be able to share nuggets of wisdom to any customer I talk to,” Maternidad related.

She has no plans of focusing on other business than coil spring. “I would like to continue what has been started. I found owning a business to be a rewarding pursuit,” she said.

This impasse was also a test of her strength to carry out her duties and responsibilities.

“When my husband passed away, I had to take charge of administrative tasks like going outdoors to process the documents,” she related.

Last 2015, Maternidad was hailed as the Regional Awardee for Mindanao in the Citi Microentrepreneurship Awards. She takes the honor of being the first Regional Mindanaoan Awardee.

Come 2009, she joined KMBI with an initial loan of PhP 4,000. She used this to purchase high carbon wires as raw materials for her coil springs. Afterwards, she did constant research and pursued continuous improvement by upgrading her machines, searching for secrets to improve the quality and tension of her springs, and introduced colored springs

“KMBI is truly my partner. I learned to expose myself to people and jibe with different faces. I never figured I’d go this far in my life, which is why KMBI is an inexpendable part of my journey,” she shared. “One thing I like about the organization is that the staff are affable and trustworthy. They are ready to step in and lend a hand,” she added.

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Featured

STORY

“And whatsoever you do, do it heartily as to the Lord and not unto men; Knowing that of the Lord ye shall receive the reward of inheritance: for ye serve the Lord Christ.” – Colossians 3:23-24 (KJV) The word “commitment” comes with a rather hefty implication. It may be easy to set our mind to start an activity or a job, but going on is something that needs to be fuelled with passion. Oftentimes, we find ourselves gradually losing the flames that keep us going until we get burn out completely. As a result, we quit and settle for a new job or hobby that we think will rekindle our passionate heart.

she admitted. In addition, Ms. Melba was initially known for her low self-esteem and apparent coyness. These characteristics held her back from bringing out her sociable self.

Nevertheless, she regarded her early days as a vast training ground for development. “My life here at KMBI has taught me to associate with fellow staff and clients and to pray for them.”

Enter KMBI Valenzuela branch, and you’ll meet Ms. Gamelba Sanoy, the Branch Accountant who has just hit her 18th year of service in KMBI.

Still, things did not go smoothly for Ms. Melba. She found out that hard work alone would not serve her dreams on a silver platter. She had to toil her way through the years and stand against obstacles which almost depleted her motivation to trudge another mile.

“There were lots of ups and downs,” she revealed. “But I kept reminding myself to focus on who I am serving through my job. I would always tell myself that I am not working at KMBI for nothing. God placed me here for a reason.”

Ms. Melba started off as a ministry worker at their local church along with her husband who is a pastor. “I really did not want to work yet, since I had to tend to my 1-year-old baby at that time. I joined my husband in serving the ministry full-time,” she shared.

She added that no job is easy, but God will provide sustaining grace to keep you going. “At every step, always keep in mind that God is at work with you, and He will not leave your side wherever you go,” she stated.

But God opened a path for her one day when someone dropped by at their church and promoted a job opening from KMBI. She felt that the organization’s mission and vision was beckoning her. “I knew nothing about KMBI at first. But when they related the purpose of the organization as well as its mission and vision, I sensed a strong feeling of connection.

It felt as if the work of KMBI is closely tied to what my husband and I were planning to do for the Lord,” she enthused.

Perhaps it is really not the nature of her work that made her stay. The real reason might be that she considered her work at KMBI her ministry. “KMBI is not just a work; it is a ministry. If you only see work as just work, then you won’t last long enough. If you are doing your job, do it not for yourself, but ultimately for God,” she highlighted.

However, to respond to the call, she had to make her biggest sacrifice. “To start my journey in KMBI, I had to send my youngest child to my brother in the U.S., since nobody else could take care of him. I had to make that decision in order to sustain my calling and fulfill my purpose here at KMBI.” However, she believed that this was but a forbearance that will eventually come to pass, and that “all things work together for good...” (Romans 8:28) She finally stepped into the doors of KMBI, but the succeeding days in the organization put her endurance to test. “When I entered KMBI, I had no past experience in accounting,”

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18 years were all it took for Ms. Melba to envision where KMBI is going in the next 30 years. Struggles may still come through, but she believes that KMBI will remain unyielding in the face of impediments. “It’s the Lord who built KMBI. I saw God’s faithfulness to KMBI and how He worked to protect the organization. Even though people may seem unfaithful at times, God remains and will remain faithful forever.”

The farther she looks back into her years in the organization, the more she reinforces the testimony of the Scripture that “unless the Lord builds the house, our labor will be in vain...” (Ps. 127:1).

Commited to the Ministry Gamelba Sanoy

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Organizational

PERFORMANCE 2016 AT A GLANCE OPERATIONAL PERFORMANCE Loan Portfolio Client Outreach

Total Amount Disbursed 2016 2015

2015

2016 Php 586,792,291

132,065

119,367

Average Loan Size

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Php 2,154,914,267

Php 2,023,898,287

Portfolio at Risk (%) 2015

2016

2015

2016

9,798.01

9,562.01

9.44%

2.45%

No. of Centers

2016

2015

Php 684,504,262.88

9.44%

2015

No. of Branches

2.45%

2016

No. of Program Officers

2015

2016

45

45

Total no. of Staff

2015

2016

2015

2016

2015

2016

4,570

4,612

505

539

814

871

FINANCIAL PERFORMANCE

OPERATIONAL INDICATORS

2015

2016

Php 1.05B

Php 1.16B

Total Liabilities

Php 708.4M

Php 757.9M

Fund Balance

Php 341.9M

Php 402.98M

Php 92.8M

Php 60.48M

Current Ratio

1.11

1.0

Debt to Equity Ratio

2.07

2.0

CBU to Outstanding Loan Ratio

51.47%

48%

LR to total Assets

60.38%

59%

Financial Self-sufficiency

125.47%

113.43%

Operational Self-sufficiency

125.95%

114.71%

Total Assets

Net income

ASSET /LIABILITY RATIOS

Kabalikat para sa Maunlad na Buhay Inc.

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Year In

REVIEW KMBI does more than just financing small and microenterprises. The organization deeply cares for the personal growth of its staff and Program Members. It does not stop innovating programs and services to help cultivate the social, economic, environmental, and spiritual values of the Program Members, making them catalysts of change and development. Nurturing transformation in the hearts of clients, KMBI heavily invests on values formation as well as livelihood and capacity building programs. Putting the seven strategic goals at the core of its foundation, the organization ensures that the programs and services are precisely attuned to a more defined rhythm.

In 2016, one of the major stints of the organization is the celebration of its 30th founding anniversary. One of the major highlights of the month-long series of activities is the historic MicroEntrepreneurs’ Summit 2016 held at the SMX Convention Center, Pasay City on October 22, 2016. More than 3,500 Program Members and guests have taken part in the large-scale activity. The Summit aimed to bring together Program Members from NCR and neighboring provinces and supply them with abundant learning opportunities courtesy of influential personalities. Program Members who attended the activity received pearl earrings from KMBI, a gift for their unrelenting support to the organization.

Staff empowerment was another focus of the celebration. The Human Capital Department brought this year’s Leadership Enhancement and Development (LEaD) Camp to reality last October 20-21 at the SMX Convention Center, Pasay City. All KMBI employees from all over the country were assembled in one venue with the common goal of forging harmonious relationships with other units and departments. Overarching with the theme, “iLive2Love&LEaD”, the two-day activity urged all staff to board on more proactive leadership roles to guide themselves and their colleagues towards fulfilling KMBI’s mission and vision. During the event, KMBI distributed anniversary cash gift to all staff in gratitude to their contribution for assisting the organization in its mission.

These two activities are just the tip of the iceberg, but it goes a long way to show how much KMBI is investing to unlock the full potential of employees in carrying out their duties as couriers of change. Similarly, the organization’s investment returns to clients through transformational activities that add value to their mind, body, and spirit, and establish their capability to transform the community and nation in their own little ways.

left: Client & staff participate in the 2016 ME Summit & LEaD Camp held at the SMX Pg. Pg. 24 24

Annual Report 2016

Year In

REVIEW Financial Products and Services

Non-Financial Products and Services

Group Loan Program (GLP) – The Group Loan Program is the flagship service of the organization. It is a tool to empower women microentrepreneurs through additional capital to help in the development of their microenterprise.

Entrepreneurial Development Services (EDS) – The EDS aims to reinforce the knowledge and enterprising skills of women microentrepreneurs through capacity-building programs and network building to establish their access to wider markets. The EDS also acts as a liaison for business development service offices to determine and better serve the demands of clients.

Individual Microenterprise Program (IMEP) – The Individual Microenterprise Program extends credit provision to graduated Program Members who require additional capital beyond the terms offered by the Group Loan Program.

Agricultural Microfinance (AMF) – The Agricultural Microfinance Program seeks to assist and provide loans to farmers and individuals in the farming sector that will enable them to further cultivate the agricultural industry in the country.

Microinsurance – Microinsurance is an add-on service of KMBI intended to protect the Program Members in cases of accident or death. This benefit comes along with the Group Loan Program and Capital Build-Up. Capital Build-Up (CBU) – Capital Build-Up is offered to Program Members to help them build up their financial resources and reduce their vulnerability to crisis and dependence on outside credit sources. The CBU is also intended to serve as additional capital when the client resigns from the program.

Unilever Pureit Loan Program – KMBI sees the importance of health and sanitation in sustaining families and businesses. Hence, the Pure-It Loan Program seeks to deliver safe and clean drinking water to the household of both members and non-members.

Mass Wedding – KMBI values the sanctity of marriage and the role of families as integral building blocks of society. Mass Wedding is one of the non-financial services of the organization directed towards legalizing the union of two cohabitating members.

Wellness Program – KMBI values the importance of securing the health of its clients.

This intervention aims to enhance the overall social, economic, and spiritual state of the Program Members. This is done in partnership with like-minded entities to bring healthrelated programs to the communities of clients.

Dalawang Iskolar per PUH – Education is highly regarded as a pivotal means of lifting families from poverty. The scholarship is given to deserving children of our progam members who have limited access to higher education due to inadequate financial resources.

Adopt-a-Daycare Program – Armed with a fervent sense of social responsibility, KMBI continues to devise methods to advocate quality education for children, among which is the donation of school supplies and sponsoring of necessary expenses projected by the daycare center.

Disaster Preparedness and Response Management (DPRM) – To mitigate the impact of calamities and unfortunate incidents on the financial condition of the Program Members, the DPRM is designed to support the members whose businesses and income have been

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KMBI

EMO

The Board of Trustees convene for the Annual General Meeting at the KMBI Head Office

Steering the wheel

Executive Management Office Securing the success of the organization is the Executive Management Office (EMO) core function. The group is home to the higher management team who steers the course of KMBI to its planned destination. The EMO keeps track of the targets and exhausts available plans to realize KMBI’s goals in all ways possible. Accompanying the higher management team are four major departments: the Corporate Affairs Office (CAO), the Audit Department, the Information Technology (IT) Department, and the Legal Services Office (LSO).

Eduardo C. Jimenez President & Vice-Chairman Pg. Pg. 26 26

Annual Report 2016

KMBI

EMO

The faculty of linking The Corporate Affairs Office (CAO) specializes both in internal and external affairs. It curates the exchange of information within the institution and turns it into a content fit for consumption by a wide spectrum of audience. It also helps facilitate transformation, in that it develops written, graphical, and audiovisual resources to give staff and clients useful pieces of information that would improve their standards of living.

KMBI aims to make management decisions transparent to all staff regardless of position. In January, the organization bared its plans for 2016 at the General Assembly for Luzon and Vismin Operations.

Throughout the year, the leadership team has been engaged in substantial partnerships.

KMBI has been meeting with like-minded organizations as well as representatives from related industries and networks to both plan and inspire participation in the opportunities it represents. To meet the strategic direction of fostering an atmosphere of trust built on integrity, KMBI embarked on the endeavour of recognizing the significant contributions of industry partners in bringing the organization’s vision to life. Through the Corporate Affairs Office, the organization mounted its 1st Partners’ Appreciation Night in July to offer gratitude to 50 partner organizations that have stood by the institution for the last 30 years.

In commemoration of the organization’s 30th anniversary, CAO released the pearl edition of its semi-annual publication, Communi-K, along with the 30th anniversary edition of the ENTREP Magazine featuring the inspiring stories of 30 outstanding clients who demonstrated exemplary deeds that capacitated them as role models of their families and communities.

Furthermore, CAO launched the 1st season of Story Caravan, the search for six (6) inspiring stories of Program Members whose lives have witnessed transformation with KMBI. The winning Program Members got a chance to tell their stories onscreen to motivate their fellow clients to keep at their endeavours.

The security of compliance The Legal Services Office (LSO) is a nice addition of support to the organization. It ensures effective management of criminal, labor, and civil cases and guarantees that all corporate regulatory laws are complied with. The function of the LSO is necessary in ensuring sustainability of KMBI as one of the organization’s strategic directions.

With the help of the Legal Services Office, KMBI has successfully complied with the requirements of the Securities and Exchange Commission (SEC) to register the KMBI Development Foundation, Inc. (KDFI) as a legal entity in April. This is one step further in spreading the philanthropic causes of the organization.

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KMBI

CSG

25 school children in Valenzuela received bags and schools supplies through the “Ambag ng KILOS sa Unang Hakbang� in partnership with APPEND and KILOS.

Turning lives 180 degrees Client Services Group In the past 30 years, KMBI has seen much progress in devising the right transformative programs for its clients. This is in big part thanks to the collective hard work of the Client Services Group in developing ways to transform the lives of the Program Members. With a pair of departments working together, the Programs and Services and Research and Development, we were able to open more non-financial services that further send our transformative agenda at the forefront.

Hazel Christine R. Bayaca Pg. Pg. 28 28

Annual Report 2016

Deputy Executive Director Client Services Group

KMBI

CSG Fostering responsible leadership KMBI views center officers as valuable extensions of staff who assist the organization in spreading its advocacy and business of transformation. For this reason, the organizaion sees the essence of feeding women leaders with right values and relevant leadership inputs.

The following month, we reached out to pre-school students of Hope Daycare Center in Calinan, Davao City for the “Adopt-a-Daycare” Program. A total of 65 young beneficiaries received school supplies, bags and personal hygiene kits. The program was conducted in joint effort with Unilever, which donated one Pure-It Excella unit to the Daycare center to provide safe drinking water and prevent water-related diseases among students.

From April to May 2016, the Center Leaders’ Conference (CLC) nurtured the psychosocial capacity of Five thousand six hundred seventy-eight (5,678) center officers nationwide.

It is an activity designed to empower center leaders by providing leadership concepts that would guide them on how to effectively manage their members and regular center activities. The Client Transformation Division worked closely with the Entrepreneurial Development Division to trace the learning needs of clients. This season of CLCs focused on People Management: Handling Different Temperaments. The activity is also aligned to the strategic direction of building close and healthy relationships.

To ensure that Daycare students get the best support for their education during their formative years, the organization seeks to motivate young learners to pursue their studies, so that they may become capable of lifting their parents and future families from the mire of poverty.

Forging spiritual oneness It is KMBI’s vision to see people in communities live in abundance with strengthened faith in God and in right relationship with their fellowmen and the rest of creation. As a Christcentered organization, KMBI values and fulfills the divine plan of God to His creation, specifically marriage and family. KMBI recognizes the significance of unifying couples under God, as it firmly believes that spiritually bound couples will be able to grow Godfearing families who serve as fundamental components of society. Hence, the idea of holding yearly ecumenical Mass Weddings came to life.

From July to September, the number of officially and legally wed couples capped at two hundred sixty-two (262). This included Program Members and one Program Officer across 41 KMBI branches nationwide.

Lighting up hopes and smiles KMBI not only sees women as individuals capable of creating social change. The organization is also aware of how children can indeed be the hope of our nation and how they can mold the future through education if they are supplied with materials conducive to effective learning. By augmenting the educational needs of young students, we desire to make a significant impact in the area of childcare and development.

Through the “AmBAG ng KILOS sa Unang Hakbang” Project conducted in May, 25 children from KMBI Valenzuela Branch received free bags and school supplies. This was made possible in partnership with APPEND Inc. and KILOS Association, an alumni organization of KILOS program graduates.

Building dreams KMBI regards education as one great pathway that would enable individuals and families to step out of poverty. Armed with a college degree or a technical-vocational certificate, individuals from low-income households may have the potential to rise above their current situation through better employment opportunities. Graduates of higher learning could also put up own microbusinesses with the skills acquired from education. KMBI continues to hope that, with higher earning capabilities, children of low-income families could potentially lift their own families from their impoverished state in a relatively shorter period of time than individuals without a college degree.

The “Dalawang Iskolar per PUH” program granted ninety-nine (99) scholarships for first semester of SY 2016-2017. On the second semester of SY 2016-2017, seventy-three (73) students received funding for their college education.

Staying in shape KMBI has been promoting wellness through its branch-initiated training and activities.

Staying true to KMBI’s health and sanitation advocacy, the Social Protection Division spearheaded the Wellness Caravan project. The main objectives of this program are to reach out to more program members using KMBI’s non-financial services; provide educational and social opportunities for clients to learn more about wellness, thereby lessening deaths and potential claims; gain deeper interaction with clients and head office/ branch staff; provide social outreach; and improve the lives of our Program Members.

In December 2016, four hundred (400) Program Members from Cebu Area were able to imbibe practical information and tips about taking care of one’s wellbeing during the Wellness Caravan. The event was packed with useful talks relating to health and wellness, coupled with zumba dance sessions and free medical consultations. This marks the third Wellness Caravan since its inception in 2013. KMBI continues with its commitment to keep the Program Members fit, smart and healthy.

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KMBI

CSG Solidifying the foothold The main business of KMBI is to advocate and work for the integral transformation of the lives of all staff, clients, and their communities. Through this framework, a deeper understanding and appreciation to KMBI’s existence, that is, why it does what it has been doing, and God’s redemptive work toward the entire creation, will be revealed.

This framework also aims to come up with standard sub-frameworks for better and more effective implementation of its program and services across all KMBI branches nationwide.

This is in consonance with our strategic direction of developing faith-based outlook and values of people.

Enriching minds through literature Center meetings are a staple part of KMBI’s program. It is an avenue for equipping Program Members with renewed spiritual outlook and right values that make them better in handling their finances, managing their families, and leading their communities. KMBI does this by spreading the word of God in the form of transformational tools and modules.

Gawaing Bahay is the first book under APPEND’s LIFE Series book. It is a transformational tool that educates, disciples, evangelizes and builds the character of its readers. In 2016, the Client Transformation Division boarded the process of developing its home-grown transformation tool to be used by the staff and Program Members nationwide.

The main objectives of the new material are to educate and motivate staff and Program Members through practical and applicable principles/guidelines in life; and to reveal God’s sovereignty and His original design to His creation by promoting renewal to every aspect of life.

Advocating causes One of the most exhaustive undertakings of the organization in 2016 was the campaign for APPEND Partylist. From April to May, KMBI went full force in promoting the Partylist in alignment to the organization’s vision. KMBI believes that having a microfinance network in the House of Representatives will amplify the voice of the MSME sector and make it more visible in the eyes of the public, thus encouraging the government to support 98% of all industries in the Philippines by formulating laws that would protect the welfare of poor enterprising Filipinos.

KMBI took the opportunity to campaign for APPEND Partylist during the Center Leaders’ Conferences of all branches. Modules and audiovisual presentations from the Partylist

Picture (above): Mass Wedding of clients in Bulacan Area Picture (below): Ms. Cecile Wee introduces the PureIt Excella to clients Pg. Pg. 30 30

Annual Report 2016

KMBI

CSG were presented to the Center Leaders to showcase the contributions of APPEND Inc. to the development of entrepreneurial poor. We also reached out to the masses through dance contests and “palengke” days. The campaign also utilized the pervasiveness of social media to endorse the Partylist.

Renewing visions Microentrepreneurs are laden with several needs, and are most vulnerable to financial breakdown especially in times of crisis. To put a remedy to this, KMBI partners with likeminded entities to spread disaster preparedness among owners of small businesses and help them cope with untoward incidents.

The Livelihood Intervention through Financing Entrepreneurships (LIFE) is a joint project of APPEND and Etimos Foundation, which aims to improve business skills, provide capacity building and finance the start up of the microenterprises of the affected people, especially women microentrepreneurs, after the devastation brought by typhoon Yolanda / Haiyan in several provinces in VisMin regions.

The seminar was held last 26 October 2016 in Roxas City, Capiz in collaboration with APPEND and its Italy-based partner organization, Etimos. The seminar was broken down into two parts: (1) ALERT; and (2) Financial Literacy. This program helped us provide clients in Roxas who were victims of Typhoon Ondoy and Yolanda gain life-saving insights on Disaster preparedness, Climate change awareness as well as Financial Education.

The seminar gained positive feedback from the participants. The Entrepreneurial Development Division hopes to adopt the program as the primary knowledge-sharing program which shall be rolled out to all branches in the future.

Repaying fruits of labor On KMBI’s 30th anniversary, the Entrepreneurial Development Division, in close coordination with the Credit Operations Group, led the recognition of 30 outstanding clients who demonstrated exemplary leadership and enterprising performance and who posed significant contributions to their community. Among the most noteworthy microentrepreneurs in the commemoration included Mrs. Lydia Malot, a big-time Nata de Coco producer in Davao and loyal KMBI Program Member who also won the National Awardee for the Citi Microfinance Awards in 2015; and Ms. Maternidad Salili, a coil spring maker in Davao who won the Regional Award category. Both Mrs. Malot and Mrs. Salili were crowned as KMBI’s Pearl Awardees along with Mrs. Elizabeth Corgio of Digos and Mrs. Rutchil Alonzo of Tagum during the 2016 MicroEntrepreneurs’ Summit last October. They

were among the 30 outstanding women microentrepreneurs of KMBI whose life stories grace the special edition of the ENTREP Magazine. KMBI hopes that the 30 outstanding microentrepreneurs will be a source of inspiration to other Program Members.

Reaching for the hearts of families At the heart of KMBI’s health and sanitation program is the Kabalikat para sa Kalinisan at Kalusugan (KKK) program which stresses the importance of having clean and safe drinking water as part of good sanitation practices. Through the efforts of the Research and Development Department, KMBI partnered with Unilever Pure-It to din into this advocacy.

This monumental endeavour sprang from the first pilot testing in Angeles Branch last December 2015. After its success, the second wave of pilot tests followed in the branches of Novaliches, Mandaue, and Metro Davao 1 in June 2016.

In September 2016, the KMBI Pure-It Team voyaged for an exchange visit to Hindustan Unilever in India to explore the Pure-It Loan Program of partner MFIs in the South Asian country, insights of which were incorporated in the finalization of loan features and guidelines during the Pure-It Workshop in October 2016.

Then, in November 2016, the Pure-It Loan Program was officially slated for rollout in all KMBI branches nationwide. A Training of Trainers (TOT) was conducted within the same month to orient concerned staff with the policies and guidelines of the new loan product.

The program is the pioneer product of KMBI under the Health and Sanitation program geared towards realizing the organization’s vision of seeing people in communities live in abundance.

Perfecting the systems In June 2016, the Board and Management invested time and effort to make substantive enhancements to the Branch Operations Manual, including improvements in the Group Loan Program, which were catered to ensure timeliness and relevance of specific policies and processes. Among the improvements that were made are: (1) Partial withdrawability of Capital Build Up for Program Members; (2) Establishment of upper limit for maximum loan – which is PhP 20,000.00; (3) Shortening of Orientation Sessions from five to four days; and (4) Conduct of Swift Orientation Sessions for Performing Centers. KMBI will continue to improve its processes and systems, ensuring its operational funds and resources are well-managed to maximize the add-on services and positive impact to its stakeholders.

This move also helps achieve the strategic direction of delivering consistent and effective transformational activities.

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KMBI

COG

A Program Officer discusses valuable insights from “Gawaing Bahay” in the center meeting.

Cutting through rocks Credit Operations Group Battling the war against poverty, the Credit Operations Group (COG) stands in the frontline to reach out to the hands of the poor. They pave way to make the organization’s transformative programs achievable. They connect the mission and vision of the organization to the hearts of clients through center meetings and empowerment activities. It has always been reiterated that the main business of KMBI is transformation, and microfinance is the instrument it uses to bring this into fruition. That is why the operations team is highly regarded as the bread and butter of the organization, the envoy of change.

Rhany P. Barrera Deputy Executive Director Credit Operations Group Pg. Pg. 32 32

Annual Report 2016

KMBI

COG

KMBI has been working to draw more women microentrepreneurs to board on KMBI’s transformational programs. For 2016, the Credit Operations Group achieved an impressive 76.53% of its target client outreach, ending the year with 119,386 Program Members.

By working with other departments, the COG was able to offer multi-loan products to clients, including the Individual Loan (IL) and Agricultural Loan (AL) programs in selected branches.

To instill leadership inputs and decision-making values crucial to the function of the operations staff, the COG facilitated training and other activities that promote growth and development to their well-being. One activity pertains to Managerial Training on Decision Making attended by Area and Branch Managers. KMBI, through the COG, conducted a Financial Literacy Training in the branches of Bacoor and Bogo. The trained staff are expected to relay the practical insights they gained to the Program Members.

With the indispensable help of the COG, the organization was able to deliver its nonfinancial services, such as Mass Wedding and Center Leaders’ Conference, to the Program Members.

KMBI supports staff and Program Members in building a solid team and forming an unbreakable bond. The Credit Operations Group permitted the branches to initiate their own activities like SummerSaya, Family Day, and teambuilding. This allowed staff

and Program Members to unwind from their day-to-day commitments and focus on recreational activities to reaffirm their affinity with one another.

One important core value of KMBI is Christian faith, and achieving this requires the staff to set aside work-related matters and strengthen their relationship with God. This is done through area-wide spiritual retreats. Branches allocated a day and a half to reconnect themselves with the teachings of the Lord and reinforce their familial sense of unity under God. As part of the 30th anniversary, KMBI was able to accumulate ticket sales for the celebration of the ME Summit, with the Credit Operations Group playing a big part in coordinating with clients to administer the ticket-selling.

Program Members are most susceptible to financial downfall especially when calamity strikes. To pre-empt this concern, KMBI apportioned a contingency budget to fuel the Disaster Preparedness and Risk Management (DPRM) plan. The COG is tasked to facilitate the distribution of relief goods and cash assistance to Program Members whose business operations have been halted by the disaster. This illustrates the commitment of the Credit Operations Group to secure People’s wellbeing and exercise Good governance and Teamwork.

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KMBI

MSG

New graduate of the ONE KMBI Program

Paradigm of continous improvement Management Services Group Whatever an individual does in the organization—whether big or small—bears great influence on the performance of the collective in the long run. KMBI deems no role trivial; every employee shares an equally important piece that completes the puzzle of transformation. This is why the Management Services Group (MSG) gives its hundred percent to offer inexhaustible support to the welfare of all staff, ensuring that everyone is functioning seamlessly in the workplace. The MSG houses three major departments that add manpower, administrative, and financial mobility to the organization: The Human Capital Department (HCD), the General Services Department (GSD), and the Finance and Accounting Department (FAD).

Madelyn Frijilliano Deputy Executive Director Management Services Group Pg. Pg. 34 34

Annual Report 2016

KMBI

MSG Values instilled The Human Capital Department supplies the organization with efficient human resources and encourages growth among staff by means of training and capacity-building. KMBI seeks to arm its employees with skills and values that enable them to become higherperforming individuals, both personally and professionally. Taking the core value People’s wellbeing to mind, the HCD is tasked to make employees feel right at home while they are in the organization.

The values formation is evident in the seven (7) batches of graduates from the Orientation of New Employees (ONE) KMBI Program. Sixty-two (62) graduates from Luzon and sixtyseven (67) from Vismin region were able to board the training program. Since its revival in 2015, the 10-day exposure program has helped newly hired staff understand their work at KMBI and assess for themselves if their values are aligned to serving the poor community.

Staff training and orientation is KMBI’s main focus, which explains why the organization spends a lot to add more value to the staff. A huge portion of the training budget was allotted for the mounting of the LEaD Camp 2016 last October 20-21 at the SMX Convention Center, Pasay City. The activity was intended to meet the strategic direction of enhancing personal valuing. For this year, the organization funded four (4) international training, twenty-four (24) external training, and three (3) internal training. This brings the total number of training for 2016 to 31.

Apart from this, KMBI dignified the operations team by renaming their job titles from Program Assistant and Program Unit Supervisor to Program Officer and Program Unit Head.

Perks enjoyed In March, KMBI approved the amended matrix in the provision of Higher Duty Allowance (HDA) of those appointed to a higher capacity. This ensures that employees who are taking on bigger responsibilities are well-compensated. Another noteworthy benefit approved this year was the allowance of Childbirth Maternity Leave. This move was guided by KMBI’s strategic direction to enhance personal valuing among employees.

The Human Capital Department echoes one of the organization’s core values, good governance, as observed in 100% compliance of all branches on DOLE’s registration of establishment.

Help extended Through the Human Capital Department and the Credit Operations Group, KMBI was able to assist two thousand five hundred (2,500) Program Members who were severely affected

by Typhoon Lawin in the North Luzon East (NLE) Area last October. Each received PhP 500 worth of cash assistance to help them recover from the devastation. This endeavour is a testament of the organization’s pledge to be one with the Program Members in times of calamity.

Figures translated The Finance and Accounting Department (FAD) plays a crucial role in monitoring and mobilizing the organization’s financial resources, helping it strategically pinpoint the key performance areas and project future gains and losses through accurate reporting of financial information. The department continues to find ways to make the processes up-to-date and more convenient by making use of the most recent utilities. One best example of this commitment is the implementation of online payment of SSS, PHIC, and Pag-IBIG contributions and loans using the Security Bank Corporation’s Digibanker system.

Another accomplishment of the department is the online payroll crediting of head office staff under the Bank of Commerce by utilizing the Corporate Internet Banking (CIB) system of the bank.

To promote unity and harmonious interregional connection amongst accounting staff, the semi-annual area meetings of Branch Accountants and Branch Accounting Assistants were held in July and December. The gathering allowed the staff to air their operational concerns and gave them chance to put the issues to resolution. In October, the department conducted the annual Branch Accountants’ (BA) Conference in Pasay City to settle differences in accounting procedures and make their processes uniform across all branches. It was also an avenue for Branch Accountants to evaluate their performance and learn the best practices in accounting.

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KMBI

MSG The organization also takes pride in the on-time filing of the Audited Financial Statements to the Bureau of Internal Revenue. This goes to show that we strongly adhere to good governance as one of the organization’s core values.

Vision Reinforced The General Services Department (GSD) caters support to the organization with its provision of administrative services, making sure that the day-to-day activities of employees remain uninterrupted. The department facilitates the technical demands of other working groups, which gives it a key role in maintaining and improving the flow of office operations.

To aid in the inter-branch transportation, KMBI tapped the GSD to purchase an Isuzu Crosswind in May. KMBI further supported the growing manpower by adding a Toyota Grandia Van, which was used to render transport services to Head Office and nearby branch staff.

In April, KMBI approved the purchase of the IJK units of the Futurepoint Plaza Condominium located in proximity to the Panay Office. The units were utilized to house the Client Services Group for a more conducive working environment that allows them to operate efficiently.

To add utility to the offices, the GSD worked year round to facilitate the procurement of new television units and other supplies for the branches and head offices. In December, KMBI expanded its facilities with an additional conference hall at the Panay Office. This would be used to conduct seminars, training and other corporate activities, such as monthly fellowships and area-wide conferences.

Recognizing the significance of the support groups in assisting the Credit Operations Group, KMBI funded the renovation of the Panay and Karuhatan Head Offices. For the Head Office in Karuhatan, the GSD facilitated the renovation of the ceiling at the 3rd and 4th floors of the building in November, as well as the ongoing waterproofing and repainting of the edifice.

On the operations side, there were several improvements as well. An allocated budget was also used to conduct leasehold improvements in the branches of San Pablo and San Mateo. Leasehold improvements for the satellite units of Kiamba, Surallah, Malita, Kabacan, Bayugan, and Carcar are underway. The GSD worked the whole year to process the leasehold improvement of eighteen (18) existing branches. The upgrades made for this year mirror KMBI’s desire for Continuous improvement. This also emanates the core value of Good governance; KMBI put to good use its God-given resources for the benefit of many.

Picture (above): Branch Accountants participate in the 2016 BA Conference in SMX Convention Center, Mall of Asia.

Picture (below): The Admin Department purchased new vehicles to support day to day activities.

Pg. Pg. 36 36

Annual Report 2016

KMBI

KDFI

Program Members listen intently during the Center Leaders’ Conference in Davao.

Transformation beyond households KMBI Development Foundation, Inc. KMBI seeks to broaden the scope of its altruistic advocacy. To do this, the organization boarded on its most thorough stint to spin off its advocacy arm, the KMBI Development Foundation, Inc. (KDFI). Its establishment was brought about with the need to expand the operational mechanism of KMBI to meet its corporate vision. Growing MFIs had recently launched into spinning off organizations that provide complementary and strategic support for the NGO. Also, this provides a separate modality, which interventions and programs outside of the NGO may be addressed and expanded further.

Born from the vision of KMBI, the KDFI will cater clear-cut programs and services directed beyond the intended beneficiaries of the organization. This includes families of Program Members, ministry partners, and victims of calamities, among others. The KDFI is also fuelled with the social performance management that seeks to formulate metrics to better assess the impact of KMBI’s services on its clients and precisely identify their growing demands. The KDFI will also actively support any causes that reflect KMBI’s mission and vision.

Reginold D. Delos Reyes Program Director, KDFI

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KMBI

Board of Trustees

BOT

ATTY. ROMEL R. BAGARES

MR.LEMUEL DAVID A. SALMO

DR. VIRGINIA P. JUAN

MR. DAVID D. GUTIERREZ

SERGIO GONZALES EDEZA

Trustee

Trustee

Chairman and Vice-President

Trustee

Corporate Secretary Pg. 38

ATTY. RAINIER CHU

Annual Report 2016 Trustee

MS. MILA M. BUNKER Trustee

MR. EDUARDO C. JIMENEZ President and Vice-Chairman

MR. EDGARDO F. GARCIA Corporate Treasurer

KABALIKAT PARA SA MAUNLAD NA BUHAY, INC. AUDITED FINANCIAL STATEMENTS December 31, 2016 (With Comparative Figures for 2015)

Kabalikat para sa Maunlad na Buhay Inc.

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R epor t of

INDEPENDENT AUDITORS

The Board of Trustees and Members Kabalikat Para sa Maunlad na Buhay, Inc. No. 12 San Francisco Street, Karuhatan Valenzuela City Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Kabalikat Para sa Maunlad na Buhay, Inc. (the “Organization�), which comprise the statement of assets, liabilities and fund balance as at December 31, 2016, and the statement of comprehensive income, statement of changes in fund balance and statement of cash flows for the year then ended, and notes, comprising significant accounting policies and other explanatory information.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Organization as at December 31, 2016, and its financial performance and its cash flows for the year then ended in accordance with Philippine Financial Reporting Standards (PFRSs).

Basis for Opinion We conducted our audit in accordance with Philippine Standards on Auditing (PSAs). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial statements section of our report. We are independent of the Organization in accordance with the Code of Ethics for Professional Accountants in the Philippines (Code of Ethics) together with the ethical requirements that are relevant to our audit of the financial statements in the Philippines, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Other Matter The financial statements of the Organization as at and for the year ended December 31, 2015 were audited by another auditor who expressed an unqualified opinion on those statements on April 5, 2016.

Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with PFRSs, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Organization’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Organization or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Organization’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with PSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with PSAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: •

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

•

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Organization’s internal control.

•

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

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Repor t of

INDEPENDENT AUDITORS

•

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Organization’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Organization to cease to continue as a going concern.

•

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Report on the Supplementary Information Required Under Revenue Regulations No. 15-2010 of the Bureau of Internal Revenue Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information in Note 27 to the financial statements is presented for purposes of filing with the Bureau of Internal Revenue and is not a required part of the basic financial statements. Such information is the responsibility of management.

The information has been subjected to the auditing procedures applied in our audit of the basic financial statements. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

R.G. MANABAT & CO.

DENNIS I. ILAN Partner CPA License No. 089564 SEC Accreditation No. 1182-AR-1, Group A, valid until April 30, 2018 Tax Identification No. 161-313-405 BIR Accreditation No. 08-001987-28-2014 Issued September 26, 2014; valid until September 25, 2017 PTR No. 5904928MD Issued January 3, 2017 at Makati City March 31, 2017 Makati City, Metro Manila Pg. 42

Annual Report 2016

KABALIKAT PARA SA MAUNLAD NA BUHAY, INC. (A Non-stock, Non-profit Organization) STATEMENT OF ASSETS, LIABILITIES AND FUND BALANCE DECEMBER 31, 2016 (With Comparative Figures for 2015)

ASSETS Current Assets Cash and cash equivalents Financial assets at fair value through profit or loss (FVPL) Loan receivables - net Other receivables - net Other current assets Total Current Assets Noncurrent Assets Available-for-sale (AFS) financial assets Property and equipment - net Other noncurrent assets Total Noncurrent Assets

LIABILITIES AND FUND BALANCE Current Liabilities Trade and other payables Capital build-up (CBU) Income tax payable Provision for probable losses Total Current Liabilities Noncurrent Liabilities Retirement benefit liability Deferred tax liability Total Noncurrent Liabilities Total Liabilities Fund Balance Initial contribution and retained earnings Fair value reserve on AFS financial assets Cumulative remeasurement gains on retirement benefit liability Total Fund Balance

2016

2015

P138,430,632 1,350,290 667,226,881 20,932,882 7,381,796 835,322,481

P118,118,897 1,727,133 586,792,291 33,885,073 6,872,433 747,395,827

10,373,980 109,206,110 205,999,028 325,579,118 P1,160,901,599

400,000 92,006,839 210,505,135 302,911,974 P1,050,307,801

P37,825,799 331,257,999 2,250,234 343,020,217 714,354,249

P25,437,318 302,777,799 709,973 343,020,217 671,945,307

43,366,388 203,780 43,570,168 757,924,417

36,196,520 255,379 36,451,899 708,397,206

291,156,976 44,723 111,775,483 402,977,182 P1,160,901,599

230,677,395 111,233,200 341,910,595 P1,050,307,801

See Notes to the Financial statements.

Kabalikat para sa Maunlad na Buhay Inc.

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KABALIKAT PARA SA MAUNLAD NA BUHAY, INC. (A Non-stock, Non-profit Organization) STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2016 (With Comparative Figures for 2015)

REVENUES Interest income Service income Foreign exchange gains Other income EXPENSES Operating expenses Administrative expenses Provision for probable losses Impairment losses Interest expense Unrealized losses in fair value changes of financial assets at FVPL INCOME BEFORE INCOME TAX INCOME TAX EXPENSE Current Deferred NET INCOME OTHER COMPREHENSIVE INCOME To be reclassified to profit or loss in subsequent periods Gain on fair value changes on AFS financial assets Not to be reclassified to profit or loss in

subsequent periods Remesurement gains (losses) on retirement benefit TOTAL COMPREHENSIVE INCOME See Notes to the Financial statements.

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Annual Report 2016

2016

2015

P417,050,417 53,478,543 307,675 915,210 471,751,845

P399,606,913 45,270,170 249,407 5,626,791 450,753,281

269,994,626 123,567,913 864,928 7,090,220

229,261,907 97,501,281 12,638,547 10,700,178 6,152,592

257,125 401,774,812 69,977,033

670,656 356,925,161 93,828,120

9,293,672 203,780 9,497,452 60,479,581

709,973 255,379 965,352 92,862,768

44,723

-

542,283 P61,066,587

(3,279,064) P89,583,704

KABALIKAT PARA SA MAUNLAD NA BUHAY, INC. (A Non-stock, Non-profit Organization) STATEMENT OF CHANGES IN FUND BALANCE FOR THE YEAR ENDED DECEMBER 31, 2016 (With Comparative Figures for 2015)

Initial Contribution and Retained Earnings Balance at beginning of year Net income Balance at end of year Cumulative Remeasurement Gains on AFS Gain on fair value changes on AFS financial assets Cumulative Remeasurement Gains (Losses) on Retirement Benefit Liability Balance at beginning of year Remeasurement gains (losses) Balance at end of year

2016

2015

P230,677,395 60,479,581 291,156,976

P137,814,627 92,862,768 230,677,395

44,723

-

111,233,200 542,283 111,775,483 P402,977,182

114,512,264 (3,279,064) 111,233,200 P341,910,595

See Notes to the Financial statements.

Kabalikat para sa Maunlad na Buhay Inc.

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Where We

SERVE

ANGELES Malonzo and Cortez Bldg., Magalang Road, Brgy. Salapungan, Angeles City Tel No: (045) 456-0449

DAET 2nd Floor, LACSON Building, Governor Panotes Avenue, Barangay 8, Daet, Camarines Norte Tel No: 885-0559

MANDAUE 3/F Cotiaoking Building, along Cebu North Road, Basak, Mandaue, Cebu City Tel No: (032) 239-8281

ANGONO 3/F Aurora Building, Quezon Avenue, Brgy. San Isidro, Angono, Rizal Tel No: (02) 806-5137

DIGOS 2/F JMC Bldg., Rizal Avenue, Zone 2, Digos, Davao Del Sur Tel No: (082) 272-0973

METRO DAVAO 1 2/F VAB Building, Mac Arthur Highway, Ulas, Davao City Tel No: (082) 297-4518

ANTIPOLO 2/F E and E Building, M.L. Quezon Street, Antipolo City, Rizal Tel No: (02) 584-7179

GENERAL SANTOS 1 Brgy. Dadiangas South, General Santos City Tel No: (083) 552-0686

METRO DAVAO 2 2/F MITRA Bldg., #160 San Pedro St., Davao City Tel No: (082) 222-4781

BACOLOD 3/F VSB Building, 6th and 7th Street, Lacson Avenue, Bacolod City, Negros Occidental Tel No: (034) 434-2577

GENERAL SANTOS 2 2/F Benjamin Napala Building, Magsaysay Avenue, General Santos City Tel No: (082) 552-0687

MANILA Unit 1B 3/f TRP Bldg. , Gonzalo Puyat St., Quiapo, Manila Tel No: (02) 254-7855

BACOOR O.M.V Building Bahayang Pagasa Subd., Molino V., Bacoor, Cavite Tel No: (046) 435-2484

GOA 2/F Bentoy Square Building, San Jose St., Goa, Camarines Sur Tel No: (054) 453-0335

BALIWAG 3/F Writ Building, 1733 Ano Street, corner Roberto Chico Street, Baliwag, Bulacan Tel No: (044) 761-1958

IRIGA L T Building, Lot 2-A, Gonzales St., San Francisco, Iriga City Tel No: (054) 456-6012

MARILAO 3rd Floor RL Building, beside Town Country Subd., Marilao, Bulacan Tel No: (044) 913-7368 NAGA 2/F Frieto Bldg., Panganiban Drive, Naga City, Camarines Sur Tel No: (054)472-2761 NOVALICHES 3/F Room 306-309, Our Lady of Mercy Building, #970 Quirino Highway corner Ramirez Street, Novaliches, Quezon City Tel No: (02) 355-7244

BOGO N1 SIM Bldg., P. Rodriguez St., Brgy. La Purisima, Bogo City, Cebu Tel No: (032) 564-9779

KABANKALAN 2/F Jomabo Building Guanzon St., Brgy. 3, Kabankalan City, Negros Occidental Tel No: (034) 471-3313

BUTUAN 2/F Chicara Building, J.C Aquino St., Butuan City, Agusan Del Norte Tel No: (085) 816-0582

KIDAPAWAN 3/F Roma Bldg., Quezon Blvd., Brgy. Sudapin, Kidapawan City Tel No: (064) 572-0941

OLONGAPO G/F Rementilla Building, 1630 Rizal Avenue, East Tapinac, Olongapo City Tel No: (047) 611-0477

CAUAYAN 3/F Room 303, CLU Building, National Highway, Cauayan City, Isabela Tel No: (078) 652-3910

KORONADAL Door #1, 3/F UGA Bldg., Gensan Drive, Koronadal City, Cotabato Tel No: (083) 520-0280

ROXAS 2/F Hernandez Building, Roxas Avenue, Roxas City, Capiz Tel No: (036) 632-0990

LAOAG 2/F Mezzanine, GTY Building, Paco Roman Street corner Gen. Luna Street, Poblacion, Laoag City, Ilocos Norte Tel No: (077) 670-7965

SAN FERNANDO Unit 1-A 3/f Brgy. Dolores City, San Fernando Tel No: (045) 409 - 3513

CAVITE UPPER 3/F VLHMC Building, Old Road Pala-pala Sampaloc I, Dasmarinas, Cavite. Front of Asia Medic Hospital beside Mercedez Village Tel No: (046) 852-3273 CEBU NORTH 4/F Martinez Bldg., Jones Ave., Cebu City Tel No: (032) 266-1690 Pg. Pg. 46 46

Annual Report 2016

MABALACAT 2/F China Bank Savings Building, Mac Arthur Highway, Dau, Mabalacat, Pampanga Tel No: (045) 892-1296

SAN CARLOS 2/F Rosario Building (SYM Motors) Rizal Street, San Carlos City, Pangasinan Tel No: (075) 634-1785

Partners & SAN FRANCISCO 3/F Bernardo Paqueo Jr. Bldg., Brgy. 4, San Francisco, Agusan Del Sur Tel No: (085) 839-3348 SAN JOSE 3/F Umerez Building, Tungko, San Jose Del Monte City, Bulacan Tel No: (044) 815-0076 SANTIAGO 3/F 17 City Road, Calao East, Santiago City, Isabela Tel No: (078) 305-1072 SURIGAO 3/F R&E Laurente Building II, 1057 Corner Rizal-Gonzales Streets, Washington, Surigao City Tel No: (086) 826-2442 TACURONG 2/F Le Gre Bldg., National Highway, Tacurong City Tel No: (064) 477-0099 TAGUM 2/F Door 12-A, Suarez Plaza, corner Sobrecary & Mabini Streets, Tagum City, Davao Del Norte Tel No: (084) 216-3292 TANDANG SORA 2/F Units 201-203 D&B Royal Midway Plaza 419, Tandang Sora Avenue, Culiat, Quezon City Tel No: (02) 952-4210 TANAY 19 J.M Catolos St., Brgy. Katipunan Bayani, Tanay, Rizal Tel No: (02) 997-3072 TUGUEGARAO Tuddao Bldg., Campos St. College Ave., Corner Caritan Centro, Tuguegarao City VALENZUELA #12 San Francisco St., Karuhatan, Valenzuela City Tel No: (02) 291-1484 VICTORIAS Jomabo Bldg., Cor. Magsaysay St., Osmeña Ave., Brgy. 5, Victorias City Tel No: (034) 717-8063 WEST AVENUE 3/F Unit F Carbal Building, No. 68 West Avenue, West Triangle, Quezon City Tel No: (02) 441-2363

AFFILIATION Ahon sa Hirap, Inc. (ASHI) Alalay sa Kaunlaran, Inc. (ASKI) APPEND Inc. APRACA CENTRAB ASA Philippines Foundation Asian School of Development and Cross-Cultural Studies (ASDECS) Asian Theological Seminary Bicol Microfinance Council, Inc. CARD NGO/CARD MRI Center for Community Transformation (CCT) Collins International Trading Corporation Community Economic Ventures, Inc. (CEVI) ECLOF Philippines First Life Financial Company, Incorporated For His Glory Multipurpose Cooperative Golden Phoenix Hotel Intellicare (HMO Provider) Katuwang Resource Center, Inc. (KRCI) Microfinance Council of the Philippines, Inc. (MCPI) Mindanao Microfinance Council Negros Women For Tomorrow Foundation, Inc. (NWTF) Nestle Philippines (Bear Brand Adult Plus) Nickosia Office of the Honorable Valenzuela City Mayor Rex Gatchalian Opportunity-Kauswagan Bank, Inc. (OK Bank) People’s Alternative Livelihood Foundation of Sorsogon, Inc. (PALFSI) Philippine Bible Society Pinoy Ako Insurance Services (PAIS) PinoyME Rangtay sa Pagrang-ay, Inc. (RSPI) REACH, Inc. Roque and Butuyan Law Offices SNS Security Services SUN Cellular Talete King Panyulung Kapampangan, Inc. Foundation (TPKIF) Taytay sa Kauswagan, Inc. (TSKI) Unilever Pure-It

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Produced by: CORPORATE AFFAIRS OFFICE KABALIKAT PARA SA MAUNLAD NA BUHAY, INC. (KMBI) 12 San Francisco St., Karuhatan, Valenzuela City www.kmbi.org.ph Pg. 48

Annual Report 2016