| ONE of 22 manufacturers rejected the project supporting sari-sari stores crafted by former President Corazon Aquino’s group PinoyME, her nephew said.
“We can’t say who [among the 22 manufacturers] signed up but I can say that one of them was very, very negative about the project,” Paolo Benigno Aquino said at a forum of microfinance groups last week.
Aquino was referring to manufacturers of commodities like shampoo, soy sauce, diapers, sardines, and biscuits that PinoyME wants to link directly to sari-sari or microretail stores.
The project, called “Hapinoy,” aims to help owners of these stores slash prices of their products by as much as 20 percent to 30 percent and still get a three percent to 10 percent profit margin.
“Under the traditional structure, manufacturers move their products to distributors who then bring it to supermarkets or wholesalers,” Aquino said at the Century Park Sheraton in Manila.
He added that based on their study of the microretail stores, the prices of products sold to these stores have increased by 10 percent to 15 percent.
“To recoup their investment, sari-sari stores also give a mark-up of 10 percent to 15 percent on the product,” Aquino said.
“We want to bypass the whole chain,” the National Youth Commission chairman added.
Aquino explained that “Hapinoy” sari-sari stores enjoying the benefits of this broken chain would have the elbow room to sell goods at best price or match the lowest price in the market.
Only sari-sari stores with links to microfinance institutions that are members of PinoyME could be included in this supply and distribution chain.
However, he said, not all of the goods from manufacturers would be sold, like cigarettes and liquor.
This concept was what one of the 22 manufacturers, which included San Miguel Corp. and Procter & Gamble, rejected.
The project, he said, would be piloted in July in the Calabarzon area targeting some 200 sari-sari stores to have links with microfinance institution (MFI) Center for Agriculture and Rural Development, Inc.
“We have to set this up immediately,” Aquino said to reach PinoyME’s goal of boosting the strength of micro-enterprises in the country and form a larger middle class.
Formed just this January, PinoyME Movement—“ME” standing for Microenterprise—groups eight MFIs in a bid to raise five million Filipinos from poverty via a P5-billion capital generation by 2010.
Still, Aquino said the targets for the “Hapinoy” project are far from being reached.
“We still need the scale; we need the numbers to show these manufacturers that this alternative supply chain can be done,” he appealed.
According to a recent report by Microfinance Information Exchange Inc., there are three major providers of microfinance services in the Philippines: nongovernment organizations (NGOs), rural banks and cooperatives.
“It is estimated that 500 NGOs, 195 banks, including four microfinance-oriented thrift banks and four microfinance-oriented thrift banks, and 4,579 savings and credit cooperatives are currently engaged in microfinance” in the country, MFIE said.
The Washington, D.C.-based nonprofit group noted that “[m]icrofinance- oriented NGOs joined the fight against poverty primarily in the late ’80s, using alternative methodologies to provide noncollateralized loans and savings instruments for the poor.”
The report titled “Benchmarking Philippine Microfinance 2005” noted that while there has been advancements along these lines, further challenges remain, especially for MFI NGOs.
These challenges include continuing to build healthy portfolios, lowering transaction costs and tapping fund sources.
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