January 2009
Alalay Sa Kaunlaran, Inc. (ASKI) as a social enterprise in the Philippines
A micro-finance insitution in favor of micro-enterprise development
Rolando B. Victoria

By Rolando B. Victoria, Executive Director


Alalay Sa Kaunlaran, Inc. (ASKI) was born in October 1986, amidst the political turmoil in the Philippines. Social issues like poverty and unemployment were widely felt. Aiming to serve the less fortunate through socio- economic development and holistic transformation.

A group of business leaders in Nueva Ecija, out of Christian zeal and compassion, joined as a response to the issues and help deliver the economic turnaround, through micro- enterprise development.

The founding members are as follows:

Mr. Norberto R. Diego, Sr.
Dr. Jacinto C. Gotangco,Sr.
Dr. Gemiliano C. Calling, Sr.
Mr. Marceliano Buco
Miss Trinidad Viloria
Miss Elenita Salvador
Mr. Aurelio Llenado

ASKI was officially registered with the Securities and Exchange Commission (SEC) on March 23, 1987 under the name “ Alalay Sa Kaunlaran Sa Gitnang Luzon, Incorporated” as a non- stock, non- profit organization committed to the promotion and development of micro and small-to-medium enterprises and the delivery of social services. On July 1, 1987, it formally launched its operations.

ASKI began in Central Luzon, also known as the central plains of Luzon. It is strategically located between the commercial center of Manila and the industrial and trading centers of Northern Luzon. 41% of its total land area of 18, 231 sq. km. are agricultural plains with rice as its major crop. Its alluvial soil is suitable for farming, which is the main occupation of the population. The region produces ¾ of the country’s total rice harvest with the province topping the list.

ASKI started its operations in Diego Building, located at the Maharlika Highway, Cabanatuan City, Nueva Ecija. With borrowed wooden chairs, an old manual typewriter and an electric fan, which was a wedding gift to Mr. and Mrs. Rolando Victoria, ASKI, piloted its first year.

Starting with a loan fund of Ps. 460,000 (US $ 21, 905), provided by the Maranatha Trust of Australia, it was able to assist 25 individual income- generating projects (23 were women- initiated IGP’s). Seventy- nine (79) jobs were created for the formerly jobless individuals. The program indirectly benefited a total 642 persons during its first year of operation.

The earthquake in July 1990 and the Mt. Pinatubo eruption the following year had transformed ASKI from microfinance NGO into a social advocate and a development NGO that would not only provide microfinance, but also receive donations for disaster rehabilitation. The calamities opened an opportunity for ASKI to widen its reach and increase its credibility and goodwill among the people of Nueva Ecija. It had the infrastructure to assist in rehabilitation of calamity victims.

Because of the earthquake, ASKI received a Php. 5 million loan from National Livelihood Support Fund (NLSF) for the victims’ rehabilitation program in the form of livelihood. It also got a Php.1 million loan from the Philippine Business for Social Progress (PBSP) for a livelihood program for the earthquake victims and another Php. 2 million from Department of Trade and Industry (DTI) for similar programs. ASKI participated in supporting the Aetas affected by the eruption of Mt. Pinatubo in their resettlement in Pinaltakan, Palayan City. The Aetas were extended income generating project (IGP) loans for their survival in the absence of job opportunities in the area. Feeding the malnourished children and training seminars on health and sanitation were components of this special program.

ASKI was one of the founding members of Alliance of Philippine Partners in Enterprise Development, Inc. (APPEND). APPEND is a network of Christian microfinance organizations that promotes Christian values.

ASKI received support from APPEND, Opportunity International Australia, and AUSAID for the livelihood of Aetas and support disaster victims. This task of helping the indigenous peoples attracted foreign donors from Australia, as this type of aid had been part of their advocacy and work among the aborigines in their own countries.

In 1992, in partnership with Grameen Bank, ASKI started its Grameen Bank Replication (GBR) Program. GBR aims to address he credit requirements of the poor in the community.

In 1996, ASKI participated in the coalition for the establishment of standards for microfinance in the Philippines after which a formal organization was established in 1999, this was known as the Microfinance Council of the Philippines, Inc. (MCPI). ASKI was one of the founding members.

Further, in 1991, ASKI introduced the Mutual Aid Fund (MAF) program. In this program, in addition to membership fees, clients contributed a certain amount upon the death or disability of a MAF member or upon the death of his/ her legal spouse or legitimate fully dependant child. The MAF program was faced with another risk of exhausting its program fund and not being able to pay for the benefits due to its clients. Thus, with ASKI’s aim to ensure improved services to its clients, while limiting the possibility risks involved implementing its programs; ASKI introduced its new MAF program, wherein clients are enrolled in Sun Life, an external insurance provider.

In 2003, ASKI decided to go beyond its borders, Central Luzon, and expand to Regions 1 and 2. This bold step eventually gave way to the adoption of new name, Alalay Sa Kaunlaran, Inc., dropping the phrase “Sa Gitnang Luzon” and was officially registered with SEC on September 23, 2004.

In 2005, ASKI joined other micro-finance institutions in organizing the Risk Management Solutions (RIMANSI) Inc., an institution that would help MFI’s in setting up their own mutual; benefit associations. Alalay Sa Kaunlaran Inc. Mutual Benefit Association (ASKI MBA) was born and was officially registered with the SEC on June 21, 2006.


Sources of funds- Considering the present economic situation local and internationally, one of the pressing challenge for ASKI is likely to be able to identify and raise funds to finance its projected growth.

Expansion- ASKI has significant potential for expansion. It can broaden geographical outreach but should first focus on deepening market penetration.

Competition from other MFI’s/ Rural Banks- ASKI is facing a strong competition from other players in microfinance segment. These competitors operate in the same market and offer similar loan products.

Development of personnel- ASKI considers its people as its main assets; however, the biggest challenge is to find those people whose commitment is also to serve the poor. ASKI is now trying to work with a university that can offer short- term courses for microfinance.

VALUES INCULCATED BY ASKI ASKI’ s Mission We endeavor to:

  • Enhance spiritual life of our stakeholders through daily devotions, retreats and Christian enrichment activities
  • Ensure economic security of our clients by providing financial services and technical expertise
  • Link with domestic and foreign partners to realize community development programs and projects
  • Develop talents and skills of the Board of Directors/ Trustees, managers and employees
  • Safeguard resources, well- being and prestige of ASKI


ASKI operates in 21 branches serving 56, 212 clients in 14 cities covering 2,746 communities in 9 provinces of Northern and Central Luzon.


ASKI takes pride in its competent personnel who are strongly committed to serve. We stand by our six core values:

· God- Centeredness · Commitment to serve the needy · Excellence · Stewardship · Integrity · Respect for people

RESPONSIVENESS ASKI delivers a comprehensive range of products and services dedicated to respond to the needs of the needy in Luzon. We actively listen to our clients to understand their needs and ably partner with them in pursuit of progress.


Alalay Sa Kaunlaran, Inc. (ASKI) is on its 22nd year as a Microfinance Institution (MFI) dedicated in creating opportunities towards a progressive community. Thru Three Pronged Strategies, ASKI surpasses more effort to assist clients in obtaining quality services. ASKI goes beyond the bounds of microfinance, as it ventures into Issue-Based Community Organizing (IBCO) towards development. This time, answering the call to assist on the delivery of social services on marginalized areas for indigenous peoples (IP) and lowlanders (non-IPs). Furthermore, ASKI also supports clients by providing training enhancements for livelihood development hence introducing their products to a wider market network.

ASKI empowers people, beyond the call of microfinance.

Challenged by the mission to promote countrywide socio-economic development and spiritual transformation, and the efforts of other development NGOs, ASKI further dug deep and wide on its routes of services. In 2002, ASKI launched its Integrated Community Development Program, which has given ASKI recognition by the PCFC for its “Microfinance Plus” services. In 2003, the Organization decided to go beyond its boarders, Central Luzon, and expanded to Regions 1 and 2. This bold step eventually gave way to the adoption of a new name, Alalay Sa Kaunlaran, Inc., dropping the phrase “Sa Gitnang Luzon”. The new name, which has given new inspiration to its Board, management, and staff, was officially registered with SEC on September 23, 2004. Further, in April 2004, the organization set-up a separate unit for its Business Development and Support Services, which is an integrated delivery mechanism of non-financial services that aims to provide clients with the leverage, opportunity bases, and markets needed to make their businesses prosper. Thus, this completes ASKI’s three-pronged strategies: microfinance development, integrated community development, and business development and support services. With these, ASKI hopes to contribute to the realization of the “Eight (8) Millennium Development Goals (MDG)”, which the Philippine Government has committed to achieve by 2015 (NSCB, 2006). For the next five years, the Organization plans to reach out to over 80,000 clients over 29 branches.

Though hindrances may come on its way, ASKI will continue to devise strategies that will be of more help to the holistic development of the micro- entrepreneurs, because ASKI believes that through stewardship, integrity, respect and commitment to serve poor, a community can live in a just and caring society, and will experience the fullness of life.

MICROFINANCE Before introducing the products to potential clients, as part of a standard operating procedure, ASKI coordinates from the local government units to the governing units in the village. Also, as part of a marketing strategy wherein, ASKI is being endorsed by local officials. For other competitors in the area, ASKI gradually coordinate with them to avoid possible double funding. ASKI implements different loan products depending on the areas being covered. For highly urbanized areas, ASKI employs ASA Methodology and individual Lending programs, both regular and small- market vendors. For rural areas, ASKI applies the Alalay Sa Kabuhayan Program.


1. Alalay sa Kabuhayan Program (AKP): Group loan model for income generating projects. 2. Individual Lending Program (ILP): This program caters to home-based businesses or businesses inside and outside the public market or central business district. it aims assist micro, small and medium enterprises with additional business capital and entrepreneurial training for business expansion. Likewise, to create more jobs and increase income. 3. Micro Housing -Alalay sa Pabahay Program (APP): Loan for house construction improvement and lot purchase. 4. Micro- agri: Loan that caters to agricultural production and agri-business ventures in agrarian communities. 5. Consumer Loan Programs · Salary Loan Program: Loan facility for employees of local government units and selected private companies · Cellular Phone Loan: Loan for purchase of cellular phones, which enables client to ease communication and generate additional income thru load selling. · Insurance Loans; aims to support the marginalized sector in times of sickness and death.
- Tricycle Operators and Drivers Insurance Program (TODIP)
- Kapamilya Insurance Program (KIP) SAVINGS PRODUCTS 1. Capital Build- up (CBU) This fund is made up of compulsory savings required by ASKI, which aims to instill value of thrift, and savings among clients. Every borrower set aside a modest amount of the loan amortization for his/her capital build- up. A member is required to save at least 15% of the total approved loan. Over time, every client gradually saves and accumulates his/ her own business capital. CBU can only be withdrawn when the client no longer wants to avail loan.

INTEGRATED COMMUNITY DEVELOPMENT PROGRAM ASKI recognizes the unique qualities of each community the clients dwell in, and in order to inculcate a difference, it will have to immerse itself in each of these communities, stir up the people’s desire for growth, and have them commit to its active pursuit. ComDev works with the community through a community organizer who facilitates the development process. He/ She assist the community in organizing and mobilizing a people’s organization that will be responsible for planning and implementation.

Stage I- Building Capacities of PO’s

Based on the results of the needs assessment, members and designated leaders receive training to equip them with the necessary knowledge and skills so they can effectively perform their roles and responsibilities. For the year 2007- 2008, 25 People’s Organizations (POs) were formed in 10 towns representing 22 villages involving 1.020 residents. Of these PO’s, 16 were framer organizations primarily formed to pursue agriculture based community projects.

Stage II- Building Capacities for Skills and Livelihood Development

The next step in community transformation is to strengthen and broaden livelihood skills through the conduct of vocational training courses. ASKI taps appropriate and private institutions to conduct the requested training sessions. The in- demand courses were: automotive, building and wiring, cosmetology, small engine mechanic and reflexology.

Stage III. Implementing Community Initiated Projects

Success in ComDev is attained when the PO’s start to act together, plan their community projects and persist until these projects are implemented and evaluated. On 2007, 81 toilet units were constructed as part of the health and sanitation program of the ASKI Communities in Laur and 24 Igorot (Indigenous peoples) from Sitio Burac, San Isisdro, Laur had electricity. Other completed projects include irrigation canal cleaning, operating a material recovery facility and waste segregation scheme and tree planting.

The standard ComDev Capacity Building Program is composed of: A. Modules for People’s Organization
- Leadership Development Training
- Organization and Project Development Training
- Resource Generation and Financial Management Training
- Paralegal Training

B. Courses for community
- Paralegal
- Values Formation
- Resource Mobilization
- Networking and Advocacy
- Basic Community Organization
- Risk and Delinquency Management

The Indigenous Peoples (IP) Program

The IP program is a block program grant from TEAR Fund New Zealand, which endeavors to contribute meaningfully to current poverty alleviation efforts in the Philippines through the adoptation and dissemination of community- specific development frameworks drawn from assessed needs, resources and readiness of poor communities.

ASKI is the lead implementor of this project entitled Reinforcing Learnings for a Community Driven Development in the Philippines among Marginalized Groups.

On its first year, it had accomplished a formation of functional working groups among Igorots. Through a Participatory Action Research consisting of participatory baseline and consultative assessments and simple market researches, it had developed 97 local leaders in Maria Aurora and Nueva Ecija. The project also extended training activities such as livelihood training program, project proposal development, leadership development training, resource mobilization, advocacy and networking and gender forum on violence against women.

To date, below are implemented Community Projects in its areas of operation:

· Completion of a potable water system renovation servicing 60 families · Spring development for 170 families · 35 out-of-school- youths was provided with vocational trainings · Implemented agriculture improvement and livelihood projects benefiting 50 farmers · Completion of social infrastructure projects such as day-care centers in two villages, an elementary school building benefiting 161 families, and bridge renovation resulting to improved mobility of 406 families.

BUSINESS DEVELOPMENT AND SUPPORT SERVICES BDSS is an integrated delivery mechanism of non- financial services that aims to provide clients with leverage, opportunity bases, and markets needed to make their businesses proper.

The ASKI BDSS Program offers ASKI Clients with opportunities to increase their entrepreneurial capacities and expand their operations. This capacity and network building program complements the microfinance program of ASKI assuring a holistic support mechanism for micro entrepreneur.

Clients could avail the BDSS services if they demonstrate growth- oriented qualities and excellent credit discipline.

Program Components

Entrepreneurship Training
-  courses promoting entrepreneurial qualities
-  business mentoring
-  vocational and skills training

Product Development
-  Business idea generation
-  Feasibility analysis
-  Prototype production (product design, packaging, technology transfer) and testing
-  Networking with BDS of government and other private institutions

Financial Management
-  simple bookkeeping and accounting course
-  mentoring in internal control

Marketing Assistance
-  assistance in participation to local trade fairs
-  business promotion through preparation of product catalogue


1. Management

Management is the key area for ASKI to achieve significant growth in the coverage of the target market. ASKI recognized the need to compete in the market for highly capable personnel and to formalize management processes have grown significantly without internal crisis.

Although management is reflected in all aspects of the institution, this indicator specifically highlights the management team. ASKI believes that a consolidated senior management team is one of the most perceptible characteristics of a successful institution. Members of the ASKI senior management team possess the indispensable commitment to their work and be empowered to flexibility and effectively make decisions based on technical criteria.

ASKI have a strong board of trustees that collectively have the skills to provide the support and wise advocate required of an NGO in the process of emerging into a bank. The BOT’s main role is to set the strategic direction, monitoring progress, and being the inspiration of the business. Many board members are also regular donors.

Board members are re- elected each year and several board members have remained on the BOT for many years. There is a strong spirit of friendship between board members, management, and staff and it is suggested that Board members periodically review the relationship to ensure that there is sufficient challenge and objectivity.

Human Resources

The HR department is well led with the mission and vision of ASKI firmly incorporated into its processes and procedure. A strong culture of performance management, target setting and 6 monthly reviews exist which in turn is supported by a comprehensive incentive scheme. ASKI has a strong recruitment process, which in turn is supported by a comprehensive training program.

The ASKI training program extends beyond recruits to incorporate all staff- the excellence of the training program has been recognized by the National Bank and is licensed for use in other MFI’s.

Clearly ASKI are aware that the specific Head Office job roles will change both with business growth and bank conversion. It is projected to develop further the existing Job Descriptions to include the additional requirements that a bank and increased size will bring.

These revised Job Descriptions could be used for as a basis of a competency review of the existing jobholders simply to identify any areas of additional training or experience that may be required.

2. Operational and Technical Skills

Information Technology System

ASKI realized the need for a good management information system to attain a successful management of an institution’s loan portfolio.

The IT section is well managed has all of the expected procedure in place to conform to an Opportunity International Network accreditation. ASKI IT department ensures that information systems generate all key reports in a precise and timely manner, that systems are efficient and cost effective. Controls are in place including a disaster recovery plan. In addition, the system must have flexibility to respond to new information needs, but also requires further investments to meet other pressing institutional needs.

The ASKI MIS system for both portfolio management and accountancy has been developed within ASKI – it is effective and provides all of the information that is currently required by management within acceptable timescales. In addition, it has the capacity to manage the demands of the business growth as defined in the current business plan.

Strategic Planning and Budgeting

ASKI has an effective participatory annual budget process with monthly review of budget when all variances to budget of plus or minus 10 % are reviewed, understood, and acted upon.

ASKI has a business plan that extends to 2010 with financial projections, which have been completed using software supplied by OIKO Credit. These projections are used for targeting, budget production purposes, and have been completed with the involvement of all management.

3. Governance

The Internal Control System of ASKI is a system of controls, which is built into the organization’s operations. It is performed and developed by management on an on- going basis to guarantee that ASKI’s business is carried out in an orderly and efficient manner.

It ensures that policies, procedures and processes are adhered into; that assets are safeguarded and records are complete and accurate; can be seen as actions taken by the management to organize and direct operations in such a way as to prevent problems arising and to provide reasonable assurance that the established objectives and operational goals are achieved, internal and external control of risk areas, efficient and economical use of resources, safeguarding of assets, provide reliable and upright information, public professionalism and transparency and complying with the policy and procedures of the Philippine laws and regulations.

The controls include: · Continuity of operations- Such control procedures ensure continuity of operations by preventing, detecting, directing or correcting failure in the event of disaster, change of personnel, or any other event affecting ASKI business · Organizational Controls- helps to ensure that all responsibilities and reporting lines are clearly established and understood by all staff, and that duties are segregated to prevent individuals from making errors or manipulating a system for their benefit. · Authorization and approvals- guarantee that processes are authorized and evidenced at an appropriated level and any inappropriate unauthorized transactions are rejected and examined. It include authorization and approvals for change of data, software, hardware as well as management and supervision of daily transactions. · Logical and physical security- this ensures well maintenance of control of access to the network, MIS, assets and that it maintain privacy and confidentiality of information on the computer and manual systems. · Management and supervision- Proper planning, monitoring and feedback to ensure effective daily running of business. · Accuracy and completeness- secure all complete records, making sure that all are accurate and correctly processed · Personnel- ensure that the abilities of staff are matched to their responsibilities, through recruitment, training and development of staff.

It is the policy of ASKI to subject itself to regular audit reviews by the Internal Audit Department, and by external auditors as well as supervision by other external bodies. The internal audit department is responsible for coordinating all audit activities and will direct findings to the Executive Director, but answers directly to the Board of Trustees. If deemed necessary by the internal auditor, findings will be given directly to the Board chairperson or Audit Committee.

Standards of Performance

Alalay Sa Kaunlaran Inc. adopts the PESO rating which is the performance standard for all types of Microfinance in the Philippines. This was formulated by the Philippines National Credit Council, an inter-agency body chaired by the Philippines Department of Finance; and was duly approved in July 2002.

The Minimum criteria for this Microfinance Operations standard are:

a. Presence of program objective to reach the poor; b. No. of active microfinance clients, classified by gender – at least 500 for group lending or 200 for individual lending; c. At least one year in microfinance operations; d. Presence of a functioning and effective management information system (MIS) for regular monitoring of microfinance operations as evidenced by timely generation of basic financial, loans tracking, and aging reports using Portfolio at Risk (PAR); e. Manual of operations or product manual; and f. At least 2 full time account officers for microfinance operations.

P E S O means… Portfolio Quality 1. Portfolio At Risk Ratio 2. Loan Loss Reserve Ratio Efficiency 1. Administrative Efficiency 2. Operational Self-Sufficiency 3. Loan Officer Productivity Sustainability 1. Financial Self-Sufficiency 2. Loan Portfolio Profitability Outreach 1. Growth in No. of Active MF Clients 2. Growth in MF Loan Portfolio 3. Depth of Outreach

ASKI, the organization has passed all those minimum criteria for the Microfinance Operations.


Driven by a common mission- The whole ASKI family know-by-heart the mission of the organization, from the board of trustees to the front liners.

Driven Management- determination and willingness to champion the initiative kept social enterprise a number one priority even in the face of crisis.

Risk taking organizational culture- ASKI managers and BOT were willing to venture into an area where few NGO’s go. A social enterprise based on organizational culture on several levels and ASKI’s leaders were able to manage that risk internally in so far as it effected staff, board and management and externally in the community and market.

Valuing the entire workforce- Training of personnel made use of both in- house experts and external partnerships to ensure that ASKI personnel get quality training and are fully equipped to handle their respective job responsibilities.

Listening to clients- ASKI recognizes what the clients have to say when it comes product and service delivery. Researches such as market researches, client retention survey, drop out study, competition analysis and product development like insurance loan for tricycle drivers, customer satisfaction survey on the health insurance products, and customer satisfaction on ASKI MBA are conducted to assess if the products and services offered by ASKI appropriately respond to their needs.

Openness to innovation- The ASKI IT department complies with the demand to continually improve the ASKI system to meet local and international standards. In addition, the continuous equipping of BOT and Management Committee with the latest innovations and Business Development Strategy.

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