The article looks at Grameen replicators in the Philippines and the Centre for Agriculture and Rural Development (CARD) in particular and stems from a 1993 evaluation of 23 replicators by the government's Agricultural Credit Policy Council (ACPC). ACPC found that repayment rates for these credit programmes was 96.8% yet operational self-sufficiency ratio averaged 0.24. The replicators were not sustainable nor did they reach a significant number of poor people. CARD went onto apply for a rural banking license under central bank supervision and prudential rules in 1996. Between 1993 and 1999 it made good progress:
* its (all female outreach) rose from 1,711 to 26,369
* operational self sufficiency ratio increased from 0.46 to 1.09
* By the end of June 1999its loan portfolio was US$2.7 million
* repayment rate was 99%
* financial self sufficiency ratio was 0.86
The article sees that other Grameen replicators in the Philippines have generally been donor-driven, donor dependency has undermined their viability and did not remotely approach an adequate level of internal resource mobilisation. Good replication demands moral commitment, peer selection and enforcement with credit discipline. Other innovative features add to social capital dimensions
* local rural bank status
* deposit mobilisation thorough differentiated products and attractive interest rates
* demand driven differentiated loan and insurance products
* client differentiation
In conclusion the article states that a Grameen-type MFI has a good chance of becoming viable and financially self-sufficient if:
* it registers as a bank
* offers differentiated loan and insurance products which cover all costs and risks
* provides larger-size loan products to its poor and near-poor members
The greatest weakness of the Grameen replication program is the lack of definition of prudential norms and of an effective delegated system of supervision under the ultimate authority of the central bank.
