T R O P E NUAL R
4 1 0 2 AN
ABOUT US
VISION People Experiencing Fullness of Life.
ABOUT US WE ARE AN INTERNATIONALLY RECOGNISED, TRANSPARENT AND SOCIALLY RESPONSIBLE MICROFINANCE ORGANISATION IN THE PHILIPPINES.
2 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
We offer financial services, consultancy and the necessary training to help businesses grow and survive. Successful businesses lead to financial security. Our goal is to transform the lives of poor families and their children. We have a broad range of effective loan, credit, insurance and savings programmes. Our financial products are well tailored to the needs of poor people and help them to grow their family livelihood.
MISSION As a sustainable Microfinance Institution, we follow Jesus Christ in promoting transformation in the lives of poor families and communities through the provision of appropriate microfinance services with values formation, training and consultancy.
We help our clients expand their businesses and provide a better future for their families and children. Through fostering the development of a small business, our clients now have the financial security to buy nutritious food, pay for healthcare services and further their children’s education.
CORE VALUES
We follow Jesus Christ. We are stewards. We are family centered. We are productive. We are committed servants.
ANNUAL REPORT 2014 | 3
ABOUT US
MESSAGE FROM SCOTT BROWN President and CEO, VisionFund International
2014 has seen our microfinance institution (MFI) in the Philippines become pioneer within our microfinance network in a number of ways. Top of that list is the development of a new loan product that serves people affected by a natural disaster so that they can recover their business and income as quickly as possible. The Bangon Recovery Loan, which was created specifically to help
4 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
victims of Typhoon Haiyan, had at the end of the year helped over 2,000 families rebuild their homes and livelihoods. This innovation has sparked interest from our colleagues in World Vision and set in motion further creative discussions around how to implement microfinance in disaster recovery. CEVI has also been a leader in demonstrating and measuring our social performance. It complies with the client protection principles as set by the Smart campaign, is an active member of the Social Performance Task Force, and has a Social Performance Committee set up by its Board which guides and strengthens its social performance initiatives. In 2009, CEVI was one of the first MFIs in our network to use the Progress out of Poverty Index (PPI) to ensure that it was reaching poor clients. This year, the PPI tool has shown that 39% of its clients live below the national poverty line, and 17% live in extreme poverty, meaning that CEV is reaching its intended clients and helping them to progress out of poverty.
It ended the financial year with a loan portfolio of over US$ 4.7 million, lent to over 31,500 borrowers, nearly half of whom live within and around areas where World Vision works. VisionFund International was established in 2003 by World Vision International. We currently operate a network of around 35 microfinance institutions, with a collective loan portfolio of nearly US$ 600 million. For more than a decade, we’ve been working faithfully as World Vision’s microfinance partner, in our shared vision to bring life in all its fullness to children by helping their communities to thrive through affordable and accessible finance. We congratulate CEVI on its outstanding accomplishments and contribution towards our global success. And we’re thankful to all local and international partners and stakeholders for supporting us in bringing sustainable improvements to local communities. Sincerely,
CEVI is part of the global VisionFund network. In 2014, our board agreed a new five-year-strategy to positively impact the lives of 9 million children each and every year by 2019. Our MFI in the Philippines will provide a strong contribution to this target. This past year, it has positively changed the lives of over 95,000 children.
_______________ SCOTT BROWN PRESIDENT & CEO VISIONFUND INTERNATIONAL
ANNUAL REPORT 2014 | 5
ABOUT US
MESSAGE FROM EDUARDO JIMENEZ Board of Trustee President
The year 2014 has been a remarkable year for Community Economic Ventures, Inc. (CEVI) in terms of challenges met, recovery, integration and impact of operations. The road was rough and stony in a figurative way but we, as an institution together with our staff, clients and other stakeholders experienced in a deeper way the Grace of God being poured out liberally as we collectively journeyed on during the year.
6 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
CEVI bounced back after we were hit by a powerful a 7.2 magnitude earthquake and the super typhoon Haiyan affecting more than 14,000 borrowers and 140 staff. The combined effort of World Vision and VisionFund International (VFI) helped in responding to the relief, rehabilitation and developmental needs of CEVI borrowers, staff members and the general community where we work. This year, CEVI started the Bangon Kabuhayan Loan, a recovery programme. It is a one–time recovery loan made available for those who suffered great loss with regard to their livelihoods. It is offered to existing clients and potential clients who were affected by Typhoon Haiyan. We have disbursed 2,144 loans amounting to more than PhP49 million. CEVI partnered with World Vision in its Cash for Work Programme. Through collaborative efforts of CEVI and World Vision, more than 45,000 Haiyan affected families received assistance/aid. Apart from maintaining a strong tie with World Vision in times of disaster, CEVI also deployed staff to help the WV Relief Operations Team. CEVI maintains the highest rating when it comes to integration with World Vision.
CEVI continues to deliver services to poor communities while giving priority to World Vision’s Area Development Programs (ADP). We continue to adopt the Progress-Out of Poverty Index (PPI) tool in the selection of its beneficiaries. Aside from offering financial services, CEVI conducted other activities that impacted the lives of people in the communities we serve. This year, with a loan portfolio of over PhP214 million, it lent to over 31,500 borrowers and positively changed the lives of over 95,000 children. In partnership with World Vision and other organizations, it is our prayer to continue to be a channel of hope and help transform the lives of those we serve. I would like to express my deepest gratitude to CEVI and its staff for being resilient, despite a series of catastrophic events, you were able to stand up, walk along, support and strengthen our beloved clients. To God be the glory! Sincerely, EDUARDO C. JIMENEZ PRESIDENT, BOARD OF TRUSTEES
ANNUAL REPORT 2014 | 7
ABOUT US
FY14 BOARD OF TRUSTEES
Mr. Eduardo C. Jimenez PRESIDENT
Ms. Filomena Portales VICE-PRESIDENT
Presently working as Microfinance Consultant of the Bangko Sentral ng Pilipinas. Looking at policy issues affecting the practice of microfinance in the banking sector, he is also the Housing Microfinance Consultant of the Asian Development Bank.
Filomena Portales is the Interim National Director of World Vision Development Foundation, Inc. She was also a Director for Public Engagement (Division includes National Resource Development, Advocacy and Public Partnership, and Media and Communications).
Mr. Jimenez has previously worked as consultant for the United Nations (UN) and other UN attached agencies as well as with other bilateral organizations.
She was once the Director for Advocacy and Communications, WVDF, 2006-2010.
8 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
Mr. Danilo Lucero, CPA TREASURER
Atty. Gregorio Austral, CPA ASSISTANT TREASURER
Danilo Lucero is a Certified Public Accountant and a Senior Pastor of JESUS Our Hope International Assemblies Inc. (JOHIA) in Marikina City, Philippines.
Gregorio Austral is a Certified Public Accountant and a Lawyer from Tagbilaran City Bohol. Currently, he serves as a college professor and Dean of the University of Bohol College of Law.
He is also the President of the CROSSCountry Farms and Parks, Inc., Chairperson of Saver’ Club and the former Deputy Director of World Vision Development Foundation, Inc.
With extensive legal experience, he became instrumental in producing competent lawyers and in building the strong reputation of the University.
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ABOUT US
Ms. Florelyn Plaza Tiu SECRETARY
Mr. Rolly Solidum BOARD MEMBER
Florelyn Plaza Tiu is currently the Director of the Humanitarian Emergency Affairs and Executive Associate for Governance of World Vision Development Foundation (WVDF).
Mr. Rolly Solidum is one of the original incorporators of Community Economic Ventures Inc. (CEVI) and has 27 years of experience in World Vision in various capacities -Program Management, Monitoring and Evaluation, Operations Audit and Micro-Enterprise Development.
Before taking this lead role, she was also the Frontline Sponsorship Initiatives Manager for World Vision International, wherein she was able to provide support in enhancing the effectiveness and efficiency of field based sponsorship operations.
Presently he is working as the Design Monitoring and Evaluation (DME) Specialist for World Vision Development Foundation (WVDF).
10 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
Mr. Michael John Spingler BOARD MEMBER Mr. Michael Spingler is a microfinance specialist with nearly 20 years of development experience providing strategic advisory, technical assistance and capacity strengthening services to INGOs, NGOs, MFIs, banks, and/or credit unions in Cambodia, Philippines, Thailand, Indonesia, East Timor, Vietnam, Myanmar, Sri Lanka, India, Mongolia, Egypt, Ghana and Nigeria.
He has previously worked with another large Cambodian MFI, with CRS and Chemonics in senior management, regional and, chief of party roles on technical assistance and capacity building projects. He is currently on the Board of six other VisionFund International MFIs in Southeast Asia.
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ABOUT US
FY14 ORGANIZATIONAL STRUC VFI REGIONAL FINANCE DIRECTOR
VFI REGIONAL DIRECTOR
BOAR TRUS
EXECU DIREC
LEGAL COUNSEL
EXECUTIVE SUPPORT GROUP
OPERA DEPAR
FINANCE, ADMIN and SYSTEM
FINANCE and ACCOUNTING
ADMINISTRATION
12 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
IT / MIS
BRANCH OPERATIONS
CTURE
RD OF STEES
AUDIT and RISK COMMITTEE
VFI REGIONAL AUDIT MANAGER
UTIVE CTOR
AUDIT DEPARTMENT
EXECUTIVE ASSISTANT
HUMAN RESOURCE DEPARTMENT
ATIONS RTMENT
SOCIAL PERFORMANCE
PERSONNEL MANAGEMENT
HR DEVELOPMENT
INDUSTRIAL RELATIONS
ANNUAL REPORT 2014 | 13
ABOUT US
COVERAGE AREAS CEVI’S ACCOMPLISHMENTS ARE CATEGORIZED INTO FIVE KEY AREAS, WHICH ARE:
• • • • • •
Values And Integration Impact And Inclusiveness Sustainability And System Institution And Industry Building Organizational Governance And Staff Well-Being Network And Resources
Serving the poor through provision of appropriate microfinance services, CEVI has served more than 31,000 families in 13 cities and 13 provinces across the Philippines.
14 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
COVERAGE AREAS
PHILIPPINES PHILIPPINE SEA
PACIFICE OCEAN SOUTH CHINA SEA
SULU SEA
CELEBES SEA ANNUAL REPORT 2014 | 15
OPERATIONS
2014 ANNUAL Values and Integration CEVI continues to implement programs that promote Christian values and full integration with World Vision. CEVI microfinance services continue to provide support in augmenting the economic living condition of poor families. This year, CEVI provided microfinance services to 31,592 families across the country. Of this number 13,505 are active borrowers within/around the ADP and project areas of World Vision. We have successfully penetrated 2,246 sponsored families of WV and impacted over 95,889 children.
The Christian Witness Program, also a World Vision Initiative, continue to contribute in promoting Christian values among CEVI staff and clients. CEVI regularly conducts weekly devotion in all its Offices, maintains partnership with 4 churches in conducting spiritual nurturing activities with staff and clients. This year CEVI partnered with World Vision in its Cash for Work Program through collaborative efforts of CEVI and World Vision, more than 45,000 Haiyan affected families received help.
16 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
ACCOMPLISHMENTS In terms of Impact and Inclusiveness, Aside from maintaining strong collaboration with World Vision in times of disaster, CEVI also deployed staff to help WV Relief Operations Team during the 7.2 magnitude earthquake and the typhoon Haiyan calamities. Over all, CEVI maintains the highest rating when it comes to integration with World Vision.
CEVI continues to provide its borrowers with appropriate loan products. CEVI continues to deliver services to poor communities while giving priority to ADP areas by adopting the Progress-Out of Poverty Index (PPI) tool in the selection of its borrowers. Thirty Nine percent (39%) of CEVI clients live below the National Poverty Line Fifty Eight Percent (58%) live below $2.50/day. Twenty Three Percent (23%) live below $1.25/day while 17% live below “Extreme� Poverty Line. This means that CEVI is reaching its intended clients.
ANNUAL REPORT 2014 | 17
OPERATIONS
2014 ANNUAL CEVI continues to give financial literacy training to its borrowers and staff. More than 5,000 borrowers received training through Credit-Plus-Education and 188 staff received staff development training.
On the aspect of Institution and Industry Building, CEVI continues to perform enhancement of its capacity to serve its clients and contribute to the development of the microfinance industry.
Under Sustainability and System, CEVI is taking prudent steps to address PAR and underachieved OSS.
CEVI continues to be a strong supporter of SMART campaign strictly complying to its client protection principles.
The Operational Self Sufficiency (OSS) increased from 71% in FY 13 to 81% in FY 14.
CEVI is an active member of Social Performance Task Force (SPTF) as an organization.
Kredits has currently shifted to automated consolidation of data from all branches. Reports which previously were generated weekly are now generated daily. For FY15, Kredits will be integrating the Loan tracking system with our accounting system.
With the Social Performance Committee (SPM) established by the Board, it is expected that SPM initiatives/ implementation in CEVI will be strengthened. Moreover, CEVI started a Recovery Program in its Haiyan affected branches. These are Ormoc, Dulag, Baybay, Sara, and Balasan branches. We offer Bangon Kabuhayan loans to existing clients and potential clients
18 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
ACCOMPLISHMENTS who were affected by Typhoon Haiyan. As of September 30, 2014 we have disbursed 2,144 loans amounting to more than PhP49 million.
Under Network and Resources, CEVI continues to link with organizations to generate funding to propel its growth.
In terms of Organization and Staff well-Being, CEVI ensures that its employees are equipped and well cared for.
CEVI is grateful to VisionFund International (VFI) and World Vision Development Foundation (WVDF), which have provided funds to CEVI to support its Operations.
CEVI has 315 employees who are dedicated to carry out its programs and services to more than 13 provinces and cities across the country.
KIVA continues to source funds for CEVI: $800,000 USD limit for the recovery project and $200,000 USD limit for the other branches.
During the year, CEVI bid goodbye to Jonar Dorado, Executive Director from 2008 to July 2014. However, two key senior officers were hired: Chief Operations Officer and Chief Finance Officer and a new position was created—Senior Operations Manager.
CEVI is grateful to the support of BPIGlobe Banko, People’s Credit and Finance Corporation, AGFP, The Mercantile Insurance Company, World Vision ADP partners and the support offices of World Vision Canada and Hongkong. Above all, CEVI is grateful to our Lord God Almighty, the Giver and Sustainer of all that we are doing.
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SOCIAL IMPACT
SOCIAL IMPACT OVER
P214 Mn PORFOLIO
86% FEMALE BORROWERS
OVER
OVER
ACTIVE BORROWERS
CHILDREN IMPACTED
31,500
95,000
MICROFINANCE LOANS HELP CHANGE THE FACE OF POVERTY. IN DEVELOPING COUNTRIES LIKE THE PHILIPPINES, MORE AND MORE PEOPLE HAVE ALREADY ENJOYED OUR LOANS PLUS THE MICROINSURANCE COVERAGE THAT WE PROVIDE. CEVI Microfinance product and services are well tailored to the poor. Aside from offering financial services, CEVI also aims to conduct other activities that have a lasting impact in the lives of people in the communities.
20 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
ANNUAL REPORT 2014 | 21
SOCIAL IMPACT
PHILIPPINES
7.2 222 DEAD BILLION IN P2.2 DAMAGES 71,822
MAGNITUDE EARTHQUAKE
SAG EPIC
FAMILIES DISPLACED (348,000 PEOPLE)
22 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
Over 3,000 CEVI borrowers and 28 staff were directly affected by the 7.2 magnitude earthquake that hit Bohol in the Philippines last October 15, 2013. CEVI has seven branches in Bohol which has more than 8,000 borrowers and 120 staff. Immediately CEVI formed an Emergency Response Team to respond to the needs of the affected staff and borrowers. This was the first time CEVI organized an emergency relief operation. A combined effort from different partners and volunteers had accomplished greatly in responding to the needs of CEVI borrowers and staff.
GBAYAN CENTER
ANNUAL REPORT 2014 | 23
SOCIAL IMPACT
7.2 MAGNITUDE EARTHQUAKE EMERGENCY RESPONSE • PhP60,000 worth of cash were immediately given to 30 staff affected. • More than PhP600,000 worth of relief goods were distributed to 2,425 borrowers affected. • World Vision provided shelter assistance amounting to PhP610,000 to 28 affected staff. • Software group gave shelter assistance to affected clients worth PhP60,000. • World Vision distributed food aid to 31 staff. • 588 children benefited from feeding in partnership with Reliv Kalogris Foundation. • More than 2,000 beneficiaries and 62 staff recieved food aid through Care Caravan. 24 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
CEVI staff repacking of relief goods at the warehouse.
Unloading of relief goods at CEVI branches for distribution to clients.
Children in Sikatuna get oriented by Ptr. Dondon during the feeding activity.
Distribution of food aid to the community through Care Caravan. ANNUAL REPORT 2014 | 25
typhoon SUPER
SOCIAL IMPACT
26 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
haiyan On November 8, 2013, the world’s strongest typhoon ever recorded devastated the Central Visayas region of the Philippines. Over 6,000 fatalities have been recorded, with close to 2,000 missing. The disaster has affected an estimated 14.1 million people and left 4 million displaced1. CEVI’s Emergency Response Team were deployed to affected areas to help assess the needs of CEVI staff and borrowers. Nearly 6,000 borrowers and 20 staff within six CEVI branches were greatly affected by the disaster. CEVI had undergone series of Management meeting on finding ways to respond to the immediate needs of the staff and borrowers. CEVI had worked together with its partners in gathering the needed resources for this disaster. 1 (OCHA, 20 Nov 2013) ANNUAL REPORT 2014 | 27
SOCIAL IMPACT
TYPHOON HAIYAN EMERGENCY RESPONSE • Over PhP2.4 million were given to affected borrowers as cash assistance. • World Vision provided shelter assistance amounting to PhP786,000 to 20 affected staff. • 630 children benefited from feeding in partnership with Reliv Kalogris Foundation. • APPEND provided relief goods and cash assistance worth PhP200,000. • VisionFund Lanka sent hygiene products and dry rations to affected staff. • World Vision Myanmar contributed PhP173,000 as cash assistance. 28 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
“I didn’t cry that my house was damaged. If we didn’t lose our fishing boat, we could still earn a living and rebuild our house and feed our family.
We’re really happy that the Bangon Loan has come to our community. It’s given us peace of mind. Because now we have a way to buy the things we need to buy.”
Lorly
ANNUAL REPORT 2014 | 29
SOCIAL IMPACT
TYPHOON HAIYAN RECOVERY
CEVI started a Recovery Program in its Haiyan affected branches. These are Ormoc, Dulag, Baybay, Sara, and Balasan branches.
The Bangon Kabuhayan Loan is a one –time
recovery loan made available for those who suffered great loss to their livelihoods. It is offered to existing clients and potential clients who were affected by Typhoon Haiyan. P BANGON
P LOAN
2,144
LOAN DISBURSED
PhP23,288
AVERAGE LOAN SIZE LOAN AMOUNT DISBURSED
4,748 CHILDREN IMPACTED
8,536
BENEFICIARIES 30 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
“Typhoon Haiyan took our two fishing boats and destroyed our house. We have nothing to eat. Good thing that we’re able to avail the Bangon loan. Without it we’ll still be starving today.
Because of Bangon loan, we’re able to recover from our livelihood.” Jessica
ANNUAL REPORT 2014 | 31
SOCIAL IMPACT PRODUCT DISTRIBUTION Small-Scale Economic Activities
Rice and Corn Production
Typhoon Haiyan Livelihood Recovery Loan
A World Vision Project in Sugarcane Areas
Hog Fattening, Sow and Boar, Feeds and Supplements
Developed Entrepreneurs
32 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
CLIENTS PORTFOLIO
CLIENTS PORTFOLIO
CLIENTS PORTFOLIO
CLIENTS PORTFOLIO
CLIENTS PORTFOLIO
CLIENTS PORTFOLIO
21,433 P111,542,685
5,912 P45,884,404 2,134 P42,561,878
1,828 P8,600,918 234 P2,358,374 79 P3,232,470
WE SERVE THE POOR THROUGH PROVISION OF APPROPRIATE MICROFINANCE PRODUCTS AND SERVICES THAT MEET CLIENTS NEEDS. CEVI has 9 different loan products with 3 major categories namely: 1) Business Loans, 2) Agriculture Loans and 3) Recovery Loans. All of these products intend to impact children indirectly by providing opportunities to parents to start and grow a business to sustain the needs of their children. Most of the loans disbursed by CEVI are business loans with coverage of over 68% of its clients and 54% of its loan portfolio.
ANNUAL REPORT 2014 | 33
SOCIAL IMPACT
SOCIAL PERFORMANCE MANAGEMENT VisionFund International is rolling out the Progress out of Poverty Index (PPI) poverty measurement tool within the network to help MFIs know the level of poverty of incoming clients and use that information to ensure we are reaching our intended clients. CEVI serves 58% of incoming clients with income below $2.5 per day. CEVI has also tracked client to client progress out of poverty over time utilizing 2012 to 2014 data of clients.
PPI Report 58%
39% 23% 17%
NPL
$1.25/day
$2.50/day USAID “Extreme”
CREDIT-PLUS-EDUCATION Provided development trainings like Leadership Trainings and Financial Literacy Training utilizing contextualized FinLit modules from Freedom from Hunger to 5,553 clients.
JOINT WORK WITH WORLD VISION CEVI and ADP have been working together in training the ADP Beneficiaries on Financial Literacy particularly on Business Management and Savings with CEVI as their facilitator.
CLIENT COMPLAINT MECHANISM Integrity and Protection Hotline is put in place for clients to easily communicate whenever they learn or witness unethical behaviour of any CEVI personnel.
34 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
CHILD WELL-BEING LOANS Impacting children through MF services is one of the intentions of the Loan Products provided to clients. Impact is being measured through the Child Well-being Outcomes to sample clients.
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SOCIAL IMPACT WE WORK TO IMPROVE THE LIVES OF CHILDREN LIVING IN POVERTY. IN 2014, AROUND 95,889 CHILDREN WERE IMPACTED BY THE DELIVERY OF OUR LOAN SERVICES. In 2014, a total of 93% of sampled clients reported some type of benefit for their children because of the loan the client had received. Almost 66% of sampled clients reported three or more benefits. The chart above shows that the top 3 benefits reported are improvements in having sufficient food (57%), basic education (54%), and sufficient drinking water (40%). CEVI has yet made reports on Child Well-being Outcomes to clients in ADP areas and will begin reporting CWBO to other areas as well starting next fiscal year. Together with the tracking of clients’ PPI over time, CEVI will then be able to measure impact to the people they serve.
36 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
STORIES OF CHANGE Hermilina works at her high-powered sewing machine together with her workers at her tailoring shop.
ANNUAL REPORT 2014 | 37
SOCIAL IMPACT Work On Your Passion From a dress shop assistant to a dress shop employer that she is now, Hermilina Cancho shares that success comes when you work on your passion and you find time for it. “This is what my mother told me about several years ago that left me a different person”, Hermilina said. “My mother told me that I need to know my passion in life and should find time for it. She is my most trusted friend in the world. My mother is my inspiration and just like her, making dresses is what makes me happy”, she added. Hermilina is a married woman from Mahayag, San Miguel Bohol and despite the poverty that her family has to face everyday, she never gives up dreaming of seeing her daughter become a computer science practitioner and her youngest son as a Hotel and Restaurant Manager someday. In Hermilina’s words: “I have never
finished school when I was young, that is why, I am really happy that my two children already finished their education. I believed that education is the best thing that I could ever give to my children. Nobody could take that away from them”.
In 1987, Hermilina decided to quit her job as an assistant in a tailoring shop in Tagbilaran City Bohol because her previous salary was only Php 300 per week and not enough to support her family needs. This is also the time that she decided to start a small dress shop using the small earnings that she has saved for 2 years. In 2006, Hermilina became a client of Community Economic Ventures, Inc. Her first loan was only Php 6,000 and she used the money to buy fabrics and thread. When Hermilina just started her shop, her first clients were her neighbors and the teachers from the local school. In 2006, her market started to expand not only in Mahayag, San Miguel but also in other municipalities of Bohol like Dagohoy and Danao. Today, she supplies wedding gowns to boutiques and provides office uniforms to her municipality. Hermilina’s succeeding loans from CEVI have allowed her to grow her capital and accommodate more customers. Her current loan is Php 20,000. She now has four sewing machines, which include one highpowered sewing machine, which allows her to produce bridal gowns and office uniforms at larger volumes.
38 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
Hermilina proudly stands in between her two newly made bridal gowns inside her tailoring shop.
Hermilina employs three workers. She gives them 40 percent wage for every dress completed. She also makes gowns for rent for special occassions. Today, Nenen Tailoring Shop earns an Annual Revenue of more than Php 200,000.
“For more than 20 years that I have focused on my business, I have learned, that when you do the things you are passionate about, you can really keep going long and you will never feel getting tired”, she added.
In Hermilina’s words: “My business has a great potential to grow. With a partner like CEVI, I am confident that we could open two more shops in the coming years. My workers and I have been working very hard to achieve our goal of expansion”, she said.
ANNUAL REPORT 2014 | 39
SOCIAL IMPACT The Moving Peddler “A Php 4,000 loan for my ready-to-wear (RTW) business put my children through school”, says Ma. Chona Coritico, a 43 year old married woman from Mahayag San Miguel Bohol. Chona studied but only completed 2 years in college due to financial constraints. She understands the importance of education and she wants her three children to finish school.
In Chona’s words:
“I want to see my son, a Marine Technologist and my youngest daughter, a Pharmacist. With a partner like Community Economic Ventures Inc. (CEVI) I think these dreams will come true”.
Chona smiles together with her daughter, a Registered Nurse, at her displayed merchandise.
40 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
Chona started her business in 1989. She used to sell six pieces of t-shirts, blouses, shorts and long pants to their neighbours and have an income just enough to buy the family basic needs. Chona said: “Our life before was really difficult and to send all my three children to school was indeed a challenge”. When Chona needed assistance to support the growth of her business, CEVI was there to assist her. Chona’s first loan in CEVI happened in the year 2006. She borrowed Php 6,000 from CEVI to buy additional merchandise for her ready-to-wear business. She proceeded to borrow more money from CEVI, and altogether her, and her family’s lives have been transformed. Today, Chona has two delivery trucks, which she uses to carry and sell her merchandise to different places five times in a week. She sold 30 dozens of T-shirts-both plain and with printed designs. Aside from this, she also sells housewares, jeans, jackets, blouses and groovy garments not only in her hometown but also to other municipalities of Bohol like Danao, Dagohoy and Pilar.
Chona currently supports six employees and she pays them daily. She has annual revenue of Php 1,152,000. Every week, Chona together with her husband travels to Cebu to buy additional merchandise replacing those items which were sold. Everyone in her community says that she is a role model. She inspires the community by being actively involved in the Catholic Women’s League. She encourages her co-members in CEVI to be part of this organization because it provides spiritual nurturing and counselling to the members. Chona said: “We spent our entire life looking after the needs of our family. We must also allot time to God who has given us with everything”. With her additional earnings from her business, Chona said: “My eldest child
is now a Registered Nurse, which is a dream come true. My family was also able to build a new house”.
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FINANCIAL
42 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
REPORT OF INDEPENDENT AUDITORS TO THE BOARD OF TRUSTEES AND MEMBERS COMMUNITY ECONOMIC VENTURES, INC. We have audited the accompanying financial statements of Community Economic Ventures, Inc. (a nonstock, nonprofit organization), which comprise the statements of assets, liabilities and fund balance as at September 30, 2014 and 2013, and the statements of income and expenses, statements of changes in fund balance and statements of cash flows for the years then ended, and notes, comprising a summary of significant accounting policies and other explanatory information.
statements 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. OPINION
MANAGEMENT’S RESPONSIBILITY Management is responsible for the preparation and fair presentation of these financial statements in accordance with Philippine Financial Reporting Standard for Small and Mediumsized Entities (PFRS for SMEs), 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. AUDITORS’ RESPONSIBILITY Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Philippine Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation and fair presentation of the financial
In our opinion, the financial statements present fairly, in all material respects, the financial position of Community Economic Ventures, Inc. as at September 30, 2014 and 2013, and its financial performance and its cash flows for the years then ended in accordance with PFRS for SMEs. Report on the Supplementary Information Required Under Revenue Regulations (RR) No. 15-2010 and RR No. 19-2011 of the Bureau of Internal Revenue Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information in Note 17 to the basic 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 supplementary information is the responsibility of management. The supplementary information has been subjected to the auditing procedures applied in our audits of the basic financial statements. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
Dennis I. Ilan Audit Partner January 9, 2015 Makati City, Metro Manila ANNUAL REPORT 2014 | 43
FINANCIAL BALANCE SHEET AS OF SEPTEMBER 30, 2014 30-Sep
30-Sep
2014
2013
P48,232,254
P74,857,278
229,942,531
165,526,499
2,822,418
3,062,212
280,997,203
243,445,989
Property and equipment - net
9,451,419
12,069,196
Noncurrent portion of receivables
5,078,083
737,051
14,529,502
12,806,247
P295,526,705
P256,252,236
P60,933,904
P67,182,878
Current portion of long-term debt
83,393,035
108,276,105
Other current liabilities
42,755,713
21,004,422
187,082,652
196,463,405
ASSETS Current Assets Cash Receivables - net of allowance for impairment losses and noncurrent portion Prepayments and other current assets Total Current Assets Noncurrent Assets
Total Noncurrent Assets
LIABILITIES AND FUND BALANCE Current Liabilities Due to clients
Total Current Liabilities Noncurrent Liabilities Long-term debt - net of current portion Retirement benefits liability Total Noncurrent Liabilities Total Liabilities Fund Balance Total Liabilitites and Fund Balance
44 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
19,436,876 84,313,384 3,493,120
4,486,041
87,806,504
23,922,917
274,889,156
220,386,322
20,637,549
35,865,914
P295,526,705
P256,252,236
INCOME STATEMENT YEAR ENDED, SEPTEMBER 30, 2014 30-Sep
30-Sep
2014
2013
P72,153,404
P66,912,713
23,959,106
21,944,702
Grants and donations
8,127,324
8,969,173
Recovery of accounts receivable written off
3,253,077
3,152,450
Miscellaneous
5,477,548
1,661,426
112,970,459
102,640,464
Salaries and other benefits
58,677,761
56,256,714
Travel and transportation
14,340,930
12,802,665
Impairment losses on receivables
13,357,445
27,103,210
Occupancy and equipment-related expenses
11,640,377
11,607,789
Interest expense
9,627,365
8,635,403
Professional fees
5,113,001
3,906,506
Provisions
3,930,608
1,241,957
Administrative expenses
3,836,579
3,537,925
Communication
1,850,828
1,794,109
Staff and board training-related expenses
1,175,448
2,976,035
900,509
864,657
3,747,973
4,881,007
128,198,824
135,607,977
(P15,228,365)
(P32,967,513)
REVENUE AND OTHER INCOME Interest income Service fees
COST AND EXPENSES
Taxes and licenses Miscellaneous EXCESS OF EXPENSES OVER INCOME
ANNUAL REPORT 2014 | 45
FINANCIAL STATEMENT OF CASH FLOWS FOR THE YEAR ENDED SEPTEMBER 30, 2014 30-Sep 2014
30-Sep 2013
(P15,228,365)
(P32,967,513)
13,357,445
27,103,210
Interest expense
9,627,365
8,635,403
Depreciation
4,875,197
5,192,308
Provisions
3,930,608
1,241,957
Retirement benefits expense
1,470,304
920,917
Unrealized foreign currency loss - net
1,333,527
823,627
(9,000)
(43,465)
Interest income
(72,153,404)
(66,912,713)
Excess of expenses over income before working capital changes
(52,796,323)
(56,006,269)
(82,071,670)
(21,045,249)
239,794
(130,432)
Due to clients
(6,248,974)
(2,636,186)
Other current liabilities
17,552,761
828,340
Cash used in operations
(123,324,412)
(78,989,796)
Interest received
72,110,565
66,091,563
Contributions to the retirement fund
(2,463,225)
(4,926,451)
Interest paid
(9,359,443)
(10,061,054)
(63,036,515)
(27,885,738)
(2,257,420)
(4,574,194)
9,000
43,465
(2,248,420)
(4,530,729)
CASH FLOWS FROM OPERATING ACTIVITIES Excess of expenses over income Adjustments for: Impairment losses on receivables
Gain on disposal of property and equipment
Decrease (increase) in: Receivables Prepayments and other current assets Increase (decrease) in:
Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Additions to property and equipment Proceeds from disposal of property and equipment Net cash used in investing activities
46 | COMMUNITY ECONOMIC VENTURES, INC. (CEVI)
Continuation of Statement of Cash Flows 30-Sep 2014
30-Sep 2013
58,828,246
24,686,394
(20,412,801)
(23,097,113)
38,415,445
1,589,281
244,466
191,935
(26,625,024)
(30,635,251)
74,857,278
105,492,529
P48,232,254
P74,857,278
CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from debt Payments of debt Net cash provided by financing activities EFFECT OF EXCHANGE RATE CHANGES ON CASH NET DECREASE IN CASH CASH AT BEGINNING OF YEAR CASH AT END OF YEAR
STATEMENT OF CHANGES IN FUND BALANCE YEAR ENDED SEPTEMBER 30, 2014 30-Sep
30-Sep
2014
2013
Balance at beginning of year
P35,865,914
P68,833,427
Excess of expenses over income for the year
(15,228,365)
(32,967,513)
Balance at end of year
P20,637,549
P35,865,914
ANNUAL REPORT 2014 | 47
Sarabia-Co-Torralba Building 2, Espuelas Street, Tagbilaran City, 6300, Bohol, Philippines Telephone: (038) 412-2356 | 501-0170 | 235-5463 Fax: (038) 412-2356 http://www.cevi.org.ph
Community Economic Ventures, Inc. (CEVI)