KMBI 2020 Integrated Annual and Sustainability Report

(A Microfinance NGO)

2020 I N T E G R AT E D A N N U A L A N D SUSTAINABILITY REPORT

KMBI 2020 Integrated Annual and Sustainability Report

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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 low-income people and their communities, by providing responsive sustainable microfinance and non-financial services.”

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

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KMBI 2020 Integrated Annual and Sustainability Report

YOUR FEEDBACK MATTERS!

TABLE OF CONTENTS

102-53

JOINT MESSAGE OF THE CHAIRMAN AND PRESIDENT OUR GOVERNANCE THE MANAGEMENT PAGHANDOM SA DAMLAG OUR RESPONSE TO THE 17 SDGS 2020 AT A GLANCE PRODUCTS AND SERVICES YEAR IN REVIEW STAKEHOLDER ENGAGEMENT MATERIAL TOPICS PARTNERS AND AFFILIATIONS WHERE WE SERVE GRI INDEX CHECKLIST 2020 AUDITED FS

If you have questions or concerns related to the publication of this report, you may contact us through:

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Corporate Affairs Office Kabalikat para sa Maunlad na Buhay, Inc. (A Microfinance NGO) 12 San Francisco St., Karuhatan, Valenzuela City (02) 8291-14-84 to 86 loc 109 http://www.kmbi.org.ph

ABOUT

THIS REPORT

The 2020 Integrated Annual and Sustainability Report is the third integrated report of KMBI. The report is prepared in accordance with the Global Reporting Initiative (GRI) Standards: Core option, and demonstrates KMBI’s commitment to keeping its stakeholders, including employees, Program Members, partners and other community members abreast of the organization’s efforts towards sustainability.

ABOUT THE COVER The cover showcases an abstract concept of coming into a full circle despite the various challenges presented by the current times.

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KMBI 2020 Integrated Annual and Sustainability Report

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102-14, 102-15

JOINT MESSAGE from the Chairman and President

2020 has turned out to be an unprecedented year for everyone globally – millions of lives were lost; jobs and businesses became unstable. We at KMBI have also encountered crisis brought by the pandemic last year. With our collective efforts, we were still able to close the year, reaching out to the poor women microentrepreneurs in the areas of our operations.

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KMBI 2020 Integrated Annual and Sustainability Report

We would like to thank our colleagues on the Board for their valuable guidance and contribution in steering the organization during these trying times.

We would also like to thank the management team for its collaboration, dedication and hard work in building on and keeping our operations intact no matter the disruption brought about by the pandemic. Such disruption resulted to a noticeable decrease against our 2019 figures in terms of revenues and operational and financial performance.

Capacity Building The pandemic hastened our conversion of inperson (face-to- face training) to virtual learning session in the form of webinars, virtual orientations and workshops. We oriented staff towards a new mindset fit to work around the demands of the new normal. The year 2020 also marked an engagement of 33 learning partners form different departments who co-shared and co-owned the capacity building initiatives using their area of expertise for the entire KMBI staff.

Our Response to the Pandemic

This year, we have also implemented a psychosocial support intervention to give staff a venue to talk about their feelings and emotions during the pandemic.

Given the situation, KMBI made a quick maneuver in its operations to maximize liquidity. This was a delicate balancing act between staff retention and portfolio risk management - an impressive feat the organization, through responsive management and active employee participation, was able to pull off.

Regular sanitation procedures are being carried out in the Head Office and nearby branches through the General Services Department (GSD). Sanitation for branches outside NCR is being outsourced in coordination with the GSD. We hastened the digitalization of our systems to better adapt to the changing work environment.

We continuously developed newer versions of our DUNAMIS, among which is the Human Resource Information System (HRIS), with the addition of new features to accommodate online DTR and working rotation schedule and online monitoring and approval. We adopted various online utilities and software applications to strengthen communication between and among groups. We also developed an in-house application to digitalize collection of health information as part of our contact tracing efforts.

As for our dear Program Members, we kept in touch through virtual seminars to get them into online entrepreneurship. Hence, we came up with our own internet marketing platform, which is currently undergoing multiple significant improvements.

We also crafted a Comprehensive Guideline on Alternative Collection and Disbursement, a document that allows KMBI operations to resume amidst the different quarantine protocols due to the COVID-19 pandemic.

Our Digital Financial Service (DFS) Program, which started in 2019, is also being pilot-tested in six branches. This program aims to digitalize the credit operations processes of KMBI. The project includes partnering and documenting multiple partner fintechs and opening up collection facilities to increase collection channels.

Human Capital We have invested a significant amount of our income for our statutory and organization’s initiated benefits such as relocation packages, service awardees, childbirth allowances, financial assistance, medical and communication allowances. We also launched the KMBI Care Pack (Protection Against COVID-19 Kit) part of the 3.8M COVID-19 Care Fund initiative of the organization to safeguard and protect the well-being of staff and program members during the pandemic.

To keep up with the new normal, we have strengthened flexible working arrangements such as work from home setup, reduced working hours and formation of skeleton workforce as well as cross-postings of staff. We have allowed our staff to engage in other income-generating activities as long as such activities will not compete with KMBI’s objectives.

The resilient response of all KMBI staff and Management to this pandemic, and their determination to get the organization back and running in the quickest time possible, is truly an inspiration to all of us. We all look forward to the arrival of the vaccine that will enable us to slowly, adapt, if not return, to the pre-pandemic life.

We are still 1 in 2021! Masaya dito sa KMBI!

David D. Gutierrez Chairman

Eduardo C. Jimenez President

KMBI 2020 Integrated Annual and Sustainability Report

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<30 y/o: 0

30-50 y/o: 1

>50 y/o: 8

OUR GOVERNANCE

MR. DAVID D. GUTIERREZ Chairman

BISHOP JOSE D. DALINO Trustee

MR. EDUARDO C. JIMENEZ President

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MR. SERGIO G. EDEZA Vice-President

DR. RODOLFO P. ESTIGOY Trustee

MR. EDGARDO F. GARCIA Corporate Treasurer

MS. ANETH NG-LIM Trustee

DR. VIRGINIA P. JUAN Corporate Secretary

MR. LEMUEL DAVID A. SALMO Trustee

The Board is responsible for providing governance, oversight of the Strategic Directions, and approval of applicable policies and enhancements in the systems and processes of the organization. It also promotes the interests of the stakeholders through the products and services being offered by KMBI. The Board has also delegated to the Management the authority to manage the day-to-day operations of the organization.

The Board of Trustees and Management firmly believe that full commitment to the standards of corporate governance is fundamental to ensure that we are able to protect the interests of all shareholders, integrity is intact and sustainability of the organization’s operational and financial performance is achieved.

BOARD COMMITTEES Trustees serve on Committees that are assembled to assist the Management in the decisionmaking on new frameworks, policies and procedures. The Board regularly meets every quarter to review the Strategic Plans, and the President updates the Board on Operational and Financial performance of the organization.

The Corporate Governance and Membership Committee recommends and nominates new individuals and professionals, who are experts in their chosen fields, to join the General Membership. The Committee pre-screen and shortlist possible candidates nominated to become a member of the General Membership, and if elected, can become member of the Board of Trustees.

The Training, SPM and Transformation Committee recommends frameworks, policies, policyrelated guidelines and budget related to, but not limited, to the following: Institutionalization of Social Performance Management; Holistic Transformation; Competency-based Training Program; Research and Development; Client Services Program; Establishment of Training Institute; and Social Protection.

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KMBI 2020 Integrated Annual and Sustainability Report

The Human Resources and Retirement Committee assists the Board in installing effective and solid human resources and robust retirement plan with the capacity to accomplish KMBI’s Human Resources’ goals: to become an outstanding employer in the Microfinance NGO industry, and to have a pool of human resources that are deeply loyal to the vision and mission of KMBI and whose service is above self-interests. The committee recommended to the Board the approval of an investment for the retirement fund of the staff.

The Audit, Risk Management and Compliance Committee is elected and organized by the Board of Trustees to assist in fulfilling its oversight responsibilities regarding the effectiveness of internal controls and systems, integrity of the financial statements, and assessment of operational and reputational risks.

The Tax and Legal Management Committee is organized to oversee and review the actions on the tax and legal cases of the organization.

Board Committee

Chair and Vice Chairman

Members

Management

Training, SPM, and Transformation Committee

Chair: Dr. Rodolfo P. Estigoy Vice-Chair: Atty. Romel R. Bagares

Ms. Mila M. Bunker Bishop Jose D. Dalino Dr. Virginia P. Juan Mr. Edgardo F. Garcia Mr. Caleb Koo

Ms. Hazel Christine R. Bayaca Mr. Timothy John A. Pasicolan Ms. Maria Cecilia V. Wee

Audit, Risk Management and Compliance Committee

Chair: Mr. Sergio G. Edeza Vice-Chair: Mr. Sebastian Quiniones

Mr. David D. Gutierrez Mr. David Salmo Mr. Eduardo C. Jimenez Atty. Romel R. Bagares Ms. Mila M. Bunker

Mr. Sancho Montaos II Ms. Maylanie Apawan Ms. Abigail Jordan

Finance Committee

Chair: Mr. Edgardo F. Garcia Vice-Chair: Mr. David Salmo

Mr. David D. Gutierrez Ms. Aneth Ng-Lim Mr. Caleb Koo

Ms. Madelyn P. Frijillano Mr. Marvin Barrieta

Corporate Governance and Membership Committee

Chair: Mr. Sergio G. Edeza Vice-Chair: Mr. Eduardo C. Jimenez

Mr. David D. Gutierrez Mr. Edgardo F. Garcia Atty. Romel R. Bagares Mr. Sebastian Quiniones Ms. Aneth Ng-Lim

Ms. Princes O. Dacca Ms. Maylanie D. Apawan

Human Capital Committee

Chair: Dr. Virginia P. Juan Vice-Chair: Mr. Sergio G. Edeza

Mr. Edgardo F. Garcia Dr. Rodolfo P. Estigoy Bishop Jose D. Dalino

Ms. Hazel Christine R. Bayaca Ms. Sharon O. Dionco Ms. Maylanie Apawan

Retirement Committee

Chair: Mr. Edgardo F. Garcia Vice-Chair: Mr. Sergio G. Edeza

Mr. Eduardo C. Jimenez Bishop Jose D. Dalino

Mr. Marvin Barrietta

Tax and Legal Management Committee

Chair: Mr. David D. Gutierrez Vice-Chair: Atty. Romel R. Bagares

Atty. Raineer Chu Mr. Edgardo F. Garcia Mr. Eduardo C. Jimenez

Ms. Madelyn P. Frijillano Ms. Maylanie Apawan

Property Development Committee

Chair: Mr. Edgardo F. Garcia Vice-Chair: Mr. Eduardo C. Jimenez

Atty. Romel R. Bagares Dr. Rodolfo P. Estigoy Bishop Jose D. Dalino Mr. Caleb Koo

Ms. Madelyn P. Frijillano Ms. Maylanie Apawan

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THE MANAGEMENT <30 y/o: 0

30-50 y/o: 48

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>50 y/o: 0

EXECUTIVE MANAGEMENT GROUP

PRINCES O. DACCA Manager Corporate Affairs Office

SANCHO A. MONTAOS II Manager Internal Audit

MAYLANIE D. APAWAN Manager Legal Services Office

MANAGEMENT SERVICES GROUP

MADELYN P. FRIJILLANO ROBERT B. SAMORTIN JR. Deputy Executive Director Acting Director Information Technology

MIRASOL C. VILLAFANE Acting Manager Finance

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ILYN T. LANDERO Acting Manager Accounting

KMBI 2020 Integrated Annual and Sustainability Report

EUNICE GALE C. TACASTACAS Manager Logistics & Facility Mgt.

JEFFERSON T. NG Manager Procurement & Distribution

JOFEL P. GANDEZA Manager Technical Services

JOEL P. CRUZ Officer-In-Charge Technical Services

TRANSFORMATIONAL DEVELOPMENT AND TRAINING GROUP

HAZEL CHRISTINE R. BAYACA Deputy Executive Director

ANSELMO EDWIN B. ARUELO Director Training and Education

RICO B. ANTION Acting Manager Entrepreneurial Services

MARIA CECILIA V. WEE Officer-In-Charge Programs & Services

LEA G. DOMINGO Manager Staffing & Employee Relations

DAWN JANDIE I. ULANGCA Officer-In-Charge Spiritual Development

SHARON O. DIONCO Director Human Capital

PAOLO MARTIN M. CAM Acting Manager Research & Development

TIMOTHY JOHN A. PASICOLAN Program Director KDFI

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CREDIT OPERA

RACHELLE M. BASIYA Deputy Executive Director

LANIE C. MONTANO Regional Director North Luzon

EARL JOHN F. BENITO Acting Area Manager North East Luzon

HERRON F. ANTONIO Acting Area Manager North West Luzon

JOSE ARCHIE R. CRUZ Area Manager Pampanga

JEANELYN T. BENGUA Acting Area Manager CALABARZON 2

JENNIFER U. LARRACAS Acting Area Manager Rizal

PHILIP B. BAUTISTA Area Manager Bicol

ROSUNNY E. DELA LUNA Area Manager ZamPen

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CASHMERE T Regional South L

KMBI 2020 Integrated Annual and Sustainability Report

MARIBETH N. PABAYOS Acting Area Manager Caraga

ALVIN Area Centr

ELIZABET Area N

HAZEL D. LA Area Ma Dav

ATIONS GROUP

T. CAYABAN Director Luzon

SHEILA DIANNE P. OSTREA Regional Director Visayas

AMELITA T. ANDILAB Regional Director Mindanao

V. OFEMIA Manager ral Luzon

DANDY K. ANDRES Area Manager Bulacan

VICTOR A. PALCE Area Manager NCR

SUSANA H. CARIÑO Acting Area Manager CALABARZON 1

TH B. ALCON Manager Negros

REYNALDO A. CAYAO Area Manager Cebu

IAN GEORGE G. BAYONA Acting Area Manager Panay

CRISMAR T. ESCALON Area Manager Northern Mindanao

LAURENTE anager vao

GRACE M. ASEDILLO Area Manager SOCKSARGEN

JANET J. SUBALDO Acting Area Manager North Cotabato

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STRATEGIC DIRECTIONS

Paghandom sa Damlag: Vision 2020 is KMBI’s five-year business plan. It is the organization’s road map, running from 2016 up until the year 2020, and is comprised of the Seven Strategic Directions which serve as the basis for specific plans, programs, and interventions. It is a product of one of the most exhaustive and participative planning activities over the years. In 2015, the Board of Trustees and the Expanded Management Committee have gathered to assess the performance of the organization vis-a-vis the needs and demands of KMBI’s stakeholders, primarily its clients – and through a meeting of minds and hearts arrived at the five-year business plan.

Paghandom sa Damlag encapsulates the perspective of sustainability promoted in the GRI standards with an additional focus on spiritual development alongside economic, environmental and social conditions as components of the broader context of sustainability. Thus, it has been used as a basis for identifying material topics in this integrated annual and sustainability report.

87%

-Development of KMBI Integral Transformation Framework -Development of Transformation Metrics/ Tracking Tools -Standardization/ Production of Transformational Tool -Standardized Transformation Activities -Spiritual Development Support Program -Social Protection Program

-Full implementation of KMBI program and services -Completion of KMBI Centralized Information System (DUNAMIS) -KMBI Brand Building activities -Social Performance Reporting -Conduct of yearly operational plan -Establishment of a Customer Relations Management System -Compliance to social performance and MNRC requirements

-Board and Management Education/Capacity Building/ BOT Field Exposure -Development and Implementation of Governance Manual

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KMBI 2020 Integrated Annual and Sustainability Report

83%

100%

-Implementation of Organization’s Transformational Program for Clients -Strengthening of standard meeting agenda and program to all centers -Non-financial services: Wellness caravan, scholarships, mass wedding, adopt a day care -ENTREP Magazine, story caravan, general assembly, center leader’s conference, transformation development forum

-Statutory and company-initiated benefits -Compliance to DOLE-related work policies -Policy development on employee’s welfare -Implementation of Grievance Mechanism through IRRProcessing of Administrative Cases -Publication of Sustainability and Annual Report -Program members recognition from various microfinance and entrepreneur industries

-Conduct of periodic performance evaluation -KMBI Advance Education Program -Implementation of staff incentive scheme and recognition system

-Framework for KMBI Community Life: Common liturgies -Implementation of employee engagement programs -Community outreach -Celebration of KMBI Anniversary

87% 89% 52% 91%

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OUR RESPONSE TO

Microfinance is at the heart of our mission. We exist to serve the poor communities and strive to address not only their financial needs, but also other aspects of their wellbeing. Our financial services are aimed at facilitating business growth of our Program Members.

We are committed to keeping track of poverty incidence among our clients through continued efforts on research and development, and use the data collected to develop our programs and services.

We collaborate with institutions that not only offer life protection, but also contribute hugely to the implementation of our health and well-being programs.

We are strong on information drives pertaining to physical and mental health for both staff and Program Members to ensure that they are leading a transformed life with good health.

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Our WASH Program serves communities without access to clean and safe drinking water.

In partnership with Water.org, we seek to address the sanitation problem that affects economically depressed KMBI 2020 Integrated Annual and areas.

Sustainability Report

Our Dalawang Iskolar kada PUH Program grants educational assistance to eligible children of our Program Members. With this program, we bridge the financial gap that hinders students from gaining access to quality education and learning institutions. We also adopt Daycare centers on a regular basis, in which we donate items to improve learning facilities and provide young pupils with their schooling needs.

98% of all businesses in the Philippines belong to the micro, small and medium enterprise sector. They are integral to national economic progress. Owners of these businesses are exactly who we serve, as the capital we provide will enable them to diversify and expand their enterprises, thus spurring employment growth in this sector.

Our work at KMBI proudly contributes to the fulfilment of 11 of the 17 Sustainable Development Goals. As a development organization joining efforts with likeminded institutions, we proactively take part in encouraging multiple facets of development within local communities, in the process achieving goals on a larger scale and in the longer term.

Our pursuit for inclusive growth speaks volume to efforts that we make to promote equality in all facets and backgrounds.

Statistics of our management and staff would best indicate diversity and inclusiveness within the organization. We formulate policies that empower those who are defined as part of marginalized groups.

Our development arm KDFI has been doubling its efforts in reforestation and rebuilding ecology in denuded areas. In the process, we also aim to restore micro economies by giving people a natural source of food and livelihood.

Through reforestation efforts consistent with our response to Goal 13 - Climate Action, we are in effect restoring biodiversity and encouraging life to flourish again in degraded lands.

Our holistic transformation framework touches on the environmental aspect of living.

We establish green policies at work and enforce them across all areas of operations.

As a faith-based organization, we uphold a strong sense of peace and justice. We highly value workplace harmony and do not tolerate disturbances that take form in conflict and corruption.

We take human morals into the core of what we do, that is why we strictly enforce policies strongly rooted on human morals, which manifests in every aspect of our transformative work.

Likeminded and charity institutions are our collaborators in responding to relevant sustainable development goals.

Together we work in contributing to the achievement of these goals. Along the way, we are taking initiatives to strengthen our bonds through appreciation activities and development forums.

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2020 AT A GLANCE

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OPERATIONAL PERFORMANCE

10.26K 185,447 170,652

2018

172,537

2019

2020

CLIENT OUTREACH

1.04B

1.16B

1.09B

2018

2019

2020

LOAN PORTFOLIO

79 5.66%

2020

PORTFOLIO AT RISK

2018

2019

2020

NO. OF BRANCHES

2018

2018

1,447

2019 NO. OF STAFF

16

1,261

2020

2018

275,908

2019

276,917

2020

198,259

LIVES INSURED

KMBI 2020 Integrated Annual and Sustainability Report

8,235

2019

2020

NO. OF CENTERS

3.27B 1,237

2020

9,532

34.01%

2019

2019

AVERAGE LOAN SIZE

6,578

2018

10.56K

77

65 3.07%

2018

10.88K

3.59B 2.23B

2018

2019

2020

LOANS DISBURSED

FINANCIAL PERFORMANCE Increase (Decrease) Percentage change 2019-2020 2019-2020

O P E R AT I O N A L I N D ICATORS

2018

2019

2020

Total Assets

1.34B

1.49B

1.395B

(95M)

(6.81%)

Total Liabilities

813.05M

928.09M

940.23M

12.14M

1.31%

Fund Balance

523.40M

560.48M

455.48M

(105M)

(23.05%)

Net (loss) / income

72.60M

43.54M

(98.90M)

(142.44M)

(327.15%)

Increase (Decrease) Percentage change 2019-2020 2019-2020

A S S E T/ L I A B I L I T Y RATIOS

2018

2019

2020

Current Ratio

1.50

1.53

1.40

(0.13)

10.77%

Debt to Equity Ratio

1.55

1.66

2.06

0.40

24.1%

CBU to Outstanding Loan Ratio

52%

51%

54.7%

3.7%

7.25%

LR to total Assets

78%

78%

78%

-

-

Financial Self-sufficiency

99.37%

98.93%

75%

(23.93%)

(31.91%)

Operational Self-sufficiency

108.18%

105.77%

83.46%

(22.31%)

(26.73%)

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PRODUCTS AND SERVICES

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Microfinance is giving financial access to the unbanked. It is what we do at KMBI and more. Our business is ensuring that social and transformational services are widely available to those who are otherwise excluded from it. We advocate inclusive growth and empowerment of the microenterprise sector by sharing opportunities to improve the quality of living of the entrepreneurial poor. We do this by addressing beyond their financial needs and looking into their holistic wellbeing.

FINANCIAL 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 microenterprises.

INDIVIDUAL MICROENTERPRISE PROGRAM (IMEP)

The Individual Microenterprise Program extends credit provision to graduated Program Members who need additional capital beyond the terms offered by the Group Loan Program.

AGRICULTURAL MICROFINANCE PROGRAM (AMF)

The Agricultural Microfinance Program seeks to assist and provide loans to farmers and individuals in the farming sector and enable them to further cultivate the agricultural sector 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.

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KMBI 2020 Integrated Annual and Sustainability Report

NON-FINANCIAL SERVICES Most of KMBI’s non-financial services are conducted in person. However, in light of the COVID-19 pandemic and the resulting social restrictions, some of these services were suspended this year in the interest of health and safety of our Program Members. Other non-financial services are being transitioned to online programs to better accommodate their growing needs at the same time continuing our work of holistic transformation.

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.

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 offered to unmarried cohabiting couples to legalize their union.

WELLNESS CARAVAN

KMBI does not only enhance the overall social, economic, and spiritual state of the Program Members, but also values their health and wellbeing. This is done in partnership with like-minded entities to bring health-related programs to the communities of clients.

DALAWANG ISKOLAR KADA PUH

Education is highly regarded as a pivotal means of lifting families from poverty. The scholarship is given to deserving children of Program Members who have limited access to higher education due to lack of financial resources.

ADOPT-A-DAYCARE PROGRAM

KMBI continues to innovate methods to push for quality education among children, part of which is donating school materials and sponsoring the needs of Daycare Centers.

DISASTER PREPAREDNESS AND RESPONSE MANAGEMENT (DPRM)

The DPRM is designed to mitigate the impact of natural disasters on the financial state of Program Members.

CENTER LEADERS’ CONFERENCE

KMBI enhances the leadership capacities of Center Leaders in handling and empowering their groups.

KMBI 2020 Integrated Annual and Sustainability Report

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YEAR IN REVIEW:

VISION FOR THE NEW NORMAL

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As we were on the way to digitalizing our systems, things rapidly took turns to the unexpected. Amid the usual business and world affairs, no one could have foreseen that the COVID-19 pandemic would befall nations, forcing us to reshape our routines, social interactions, and business conducts to adapt to the “new normal” world.

On March 17, 2020, the government placed the entire island of Luzon under Enhanced Community Quarantine. Since then, KMBI’s Risk Committee has been taking proactive steps to respond to the changing work demands under the new normal.

The COVID-19 pandemic has impacted not only the small enterprises that KMBI supports, but also large-scale business operations, with microfinance being one of the hardest-hit industries in the country. Small enterprises halted incomegenerating activities, and microfinance institutions (MFIs) have consequently suspended loan disbursements, collections and profit-generation.

The effects of quarantine presented a serious challenge to the existing operational processes and policies, as well as movement, of businesses including MFIs. For one, conducting center meetings, one of KMBI’s defining transformational activities, is suspended. KMBI has also issued moratoriums on loans as prescribed by the circulars of the Bangko Sentral ng Pilipinas.

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KMBI 2020 Integrated Annual and Sustainability Report

To minimize infection among staff, KMBI implemented a full-scale work-fromhome setup in areas with high number of COVID-19 infections. Branches also operated under limited capacity.

In May, MFIs were among the businesses included by the government as an essential service, tagging them as economic frontliners. This has allowed MFIs to resume operations and work on their current liquidity situation. During this time, KMBI reopened its head offices for physical reporting but with severely limited movement and stringent health measures.

In June, restriction in most of the country was lifted to General Community Quarantine (GCQ). As per the Memorandum No. M-2020-042 issued by the Bangko Sentral ng Pilipinas, the mandatory grace period for loans no longer applied to areas under GCQ or Modified GCQ beginning June, but will resume application should an area be reverted to Enhanced Community Quarantine (ECQ) or Modified ECQ (MECQ).

With the reimposition of MECQ in some areas including Metro Manila, families and businesses would again need to tighten their belts.

Left: Ivy Millare, a buko pie manufacturer and CMA 2018 Mindanao Awardee; Right: Maternidad Salili, coil spring producer and 2015 CMA Mindanao Awardee

Ivy Millare, one of KMBI microentrepreneurs who won several awards and recognitions, lost 60% of her sales when community lockdowns were enforced in light of the pandemic. The decline in sales and income made her worry for her nine employees as well.

to sustain, and while it made sense for businesses to cut back on employees, she retained their employment, as a way of paying back to their loyalty and contributions to her business growth.

Her goodwill and positive reputation with her clients was key to keeping her business running. A private company referred by some of her loyal customers tapped Salili’s services to produce spring coils for hands-free sanitizers.

It was a tough time selling her famous buko pies. Instead of letting them spoil, she donated the excess quantity to frontliners within her community. These very same recipients reached out to her and offered to become resellers of her She had five employees before pandemic, products. Together, they made up 60% of and she still has all of them employed at her resellers. present. Although her income is still not back to pre-pandemic levels, she is still Besides catching up to her reduced sales grateful that she was able to suffice the during the beginning of the pandemic, needs of her employees and her family.

Millare is also able to help her community generate livelihood through a reseller 2020 is a year of learning for KMBI. The business model. Because of this, her organization has learned to take the products reached neighboring provinces threats posed by the new normal as an like Cotabato, General Santos and Davao. opportunity to hasten the digitalization of its loan processes, allowing for smoother, Another story of resiliency amidst more convenient transactions and more the pandemic can be heard from flexible systems for the Program Members.

Maternidad Salili, another award-winning This will mean advancement of financial KMBI microentrepreneur from Davao. Her inclusion and improved adaptability of customers stopped operations, reducing KMBI in times of crisis. business income. She had employees

KMBI 2020 Integrated Annual and Sustainability Report

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Victor Palce, NCR Area Manager, shares his experiences and learnings during the pandemic

The National Capital Region was one of the hardest-hit areas of the COVID-19 pandemic. Victor Palce, Area Manager of NCR, relates the situations he had gone through in the height of community lockdowns.

“It’s the first time something of this scale has happened,” Victor said as he recalled the confusion and uncertainties that came with the announcement of community quarantines. Hailing from Bicol, Victor was fortunate to have returned home to his family before lockdowns were announced.

Working from home was a drastic change to his work style. Remote communication was something he had to learn very quickly. He was urged to learn new ways of interacting with his staff, peers and superiors in replacement of physical interaction. It took a few months before restrictions were levelled down, and Victor got a call from his superiors asking him that he would need to report to his area, and so had to heed his call of duty.

Fear and uncertainty met him when he arrived in Manila. “I was afraid of getting too close to people because you’ll never know who might have contracted the virus,” Victor shared. He also relayed the challenges of getting to and from work.

Apart from limited public transportation, fear of physical interaction prompted him to make sacrifices. “That’s why I would take long walks just to go to the office.”

He had witnessed the sacrifices of his staff as well. They braved through the 22

KMBI 2020 Integrated Annual and Sustainability Report

risks just to carry on with the duty of helping the Program Members especially in this time of need. Victor admitted how tough it was for their Program Members to make ends meet, let alone settle their financial obligations. During the moratorium period, Victor made sure Program Members feel the social support that they need. “We need to make them [Program Members] see that we are the light during these dark times. We have to encourage and inspire them to move forward as we do as an organization.”

Away from his family in the middle of uncertain situations, Victor did not feel far from home as he found care and support from his KMBI family. “My colleagues would always check on me to make sure I was okay the whole time.” He added, “I’m proud to be part of team NCR, and we are all together in rising above this pandemic.”

Victor commits to return the favor to his colleagues by setting a good example and leading his people into the new normal ways of operations.

The effects of the pandemic brought lessons for Victor and his staff in NCR. “We can carry new goals and new normal way of operations into next year. Let us learn to look at the advantage and strengths that this pandemic has brought, rather than focusing on the bad things that happened.” He remains optimistic that once this pandemic is over, we will come out stronger, more inspired, more faithful, and more focused.

Victor with his NCR team in West Avenue Branch, pre-pandemic

ALL SYSTEMS GO This year, KMBI took this chance to hasten the digitalization of its processes and systems and overturn the effects of the pandemic. The new normal has opened many ways for the organization to adapt and shape its system to fit in the changing world.

In compliance with the mandate of the IATF, KMBI developed its own contact tracing application, called “KMBI Health Checklist”, accessible via Android mobile platform and website. The system logs the health information of all staff as part of its contact tracing efforts.

The Dynamic Unified Network and Management Information Systems (DUNAMIS), KMBI’s home-grown IT system, has seen significant improvements. The Human Resource Information System (HRIS) now features online DTR and working rotation schedule that allows staff to monitor their timekeeping record.

The KMBI Health Checklist application

KMBI also developed an Application Program Interface (API) as a biller of the PayMaya Application. Alongside this, the organization developed a web application to store collected payments from payment channels.

JUAN DELA CRUZ

DUNAMIS Dashboard showing the Daily Time Record and rotation schedule for monitoring of staff reporting.

KMBI 2020 Integrated Annual and Sustainability Report

23

COMMUNITIES

413-1

It is not only in financial processes where KMBI found opportunities to innovate. This year, the Entrepreneurial Development Division developed and launched the KMBI Online Merkado. This online marketing platform uses the ubiquity of the social media platform Facebook to connect Program Members together and allow them to market their products to a wider audience.

The organization also assisted 5 Program Members to avail the PhP 50,000.00 rehabilitation grant from Citi Foundation and Microfinance Council of the Philippines.

Recipients of seed grant include Ivy Millare, a buko pie manufacturer in Koronadal, Ms.

Marisa Ganding, spa owner in General Santos and more branches in Mindanao, Ms. Lydia Malot, award-winning nata de coco producer in Davao, Ms. Maternidad Salili, coil spring manufacturer in Davao, and Ms. Teresita Lano, producer of fish and rice crackers.

Two of these Program Members, Millare and Salili, were recognized in a national newspaper for their resilience amidst the pandemic and how they found and maximized the business opportunities presented.

In response to COVID-19 restrictions, the Research and Development Department crafted a comprehensive alternative collection and disbursement which was used in the resume of operations amidst the different health and quarantine protocols. The Digital Financial Service (DFS) program, which started in 2019, is being pilot tested in 6 branches.

The DFS aims to digitalize the credit operations processes of KMBI by engaging in partnership with multiple financial technology and collection facilities to expand payment channels.

This year, KMBI launched an online marketing webinar on how to use various online platforms for business marketing, as well as a webinar on how to avoid online fraud. The first batch of Navigating Online Marketing Webinar was held in Batangas Branch in November via Zoom. It tackled how Program Members can best use digital marketing platforms to attract sales and widen their market reach.

24

KMBI 2020 Integrated Annual and Sustainability Report

Providing Relief in Times of Need

In November, various provinces in the country were struck by consecutive typhoons, causing massive flooding and destruction of homes of thousands of families. Among those affected were about 10,333 KMBI Program Members and their families in the areas of Metro Manila, Rizal, Bicol, and Calabarzon.

In response to this calamity, KMBI initiated an online donation drive, “Saan Aabot ang P20 Mo?” alongside the call for in-kind donations.

KMBI branches nationwide participated in coordinated relief efforts through the organization’s Disaster Preparedness and Response Management (DPRM) program, one of the non-financial services of KMBI that provides relief assistance to Program Members affected by natural calamities and disasters.

Calamities that happened this year exacerbated the economic concerns already presented by the ongoing health crisis. With DPRM, KMBI places a higher priority on the safety and wellbeing of its Program Members.

KMBI 2020 Integrated Annual and Sustainability Report

25

EMPLOYEES

401-1, 404-1, 404-2, 404-3, 405-2

Staff training has found a way to online videoconferencing as well. The challenges of the new normal opened other venues for learning and education. KMBI has conducted a total of 57 training sessions with 2,439 trainees in 2020.

196 newly hired employees

12 hours

Average hours of training per employee (15,188 total hrs spent)

45% Male

Rank and File Supervisory Junior Management Senior Management

60% 45% 55% 55%

40% 55% 45% 45%

55% Female

Employee Gender Distribution

Average no. of Training Hours

This is also the time psychosocial support is needed more than ever. KMBI implemented an intervention program entitled K-mustahan Session - a 3-part series on virtual conversation and psychosocial activities for KMBI staff. This aims to keep staff mentally healthy and engaged at work.

During its 34th anniversary celebration held virtually, KMBI launched the KMBI Care Protection Against COVID-19 Kit (PACK). KMBI provided free face masks and Vitamin C to staff. The organization also allotted a substantial amount of funds in case of COVID-19 infection among staff and Program Members. Information bulletins and health reminders are also being disseminated regularly to all staff.

26

KMBI 2020 Integrated Annual and Sustainability Report

PARTNERS AND REGULATORS KMBI was quick to adopt the COVID-19 health protocols mandated by the Inter Agency Task Force for the Management of Emerging Infectious Diseases (IATF). Disinfection of Head Office and branch offices is performed regularly. Office establishments also put in place floor signages to manage traffic within enclosed spaces and ensure proper physical distancing. Sanitation reminders and disinfectants were provided upon entry and exit of staff and guests.

To prevent crowding and further spread of the virus, KMBI limited office reporting capacity to 50% and implemented a rotation schedule in conjunction with shortened working hours and work-from-home arrangement.

Staff, clients and guests are required to fill out health declaration forms and undergo temperature screening before being permitted entry. For offices in Valenzuela City, the City’s contact tracing system, ValTrace, is employed as the contact tracing measure before granting entry to staff and guests.

KMBI was included in the Omnibus issued in May 2020 as an essential service, thus permitting operations with limited movement. The organization also crafted policies on grace period for loans in accordance to the provisions stated by the Republic Act 11494 or Bayanihan 2, providing economic relief for affected Program Members.

In response to the growing need for virtual training, KMBI sought 33 training partners to intensify its training programs. This internal engagement allows members from different departments to share their subject matter expertise in line with the training needs of other staff.

KMBI 2020 Integrated Annual and Sustainability Report

27

STAKEHOLDER ENGAGEMENT Stakeholders give value to our transformational work as much as we pay back to the communities that we serve. These stakeholders include industry partners, suppliers and networks, clients, staff, local communities, and regulators.

Industry partners, suppliers and networks At KMBI, we affirm transparency and open communication. Our partners give value to the work that we do by investing their resources to the organization. We keep close lines with our partners by celebrating years of connectedness and fostering long-term healthy relationships which are integral to sustainability. 102-43 We ensure that our suppliers share the same goal and values with KMBI, and that they have a deep understanding of the business of the organization. We enforce strict policies on selecting suppliers as part of our commitment to maintain fair and healthy competition in dealing with vendors, taking into careful consideration various aspects such as environmental impacts and labor conditions, among others. 102-42 We pay high regard to the networks that we belong to, as they play a significant role in getting microfinance institutions—who could otherwise be competitors in the industry—to work together and achieve the common goal of eradicating poverty. We do this by taking a proactive approach to efforts initiated by the networks and responding to their needs.

Program Members Our main business would not be possible without clients patronizing our services. We allocate a huge share of our net income to strengthen the provision of non-financial services. We value social responsibility and strive to make a long-term positive impact on the communities where we operate.

Staying true to one of our Strategic Directions, we value consistency in the effective and truthful delivery of our transformational services to those who need it most.

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KMBI 2020 Integrated Annual and Sustainability Report

Local communities We consider urgent the need to extend our services beyond our Program Members and their families. We continue to devise programs cater not only to our clients, but also to the people living within the localities that we serve. We aim to build community leaders now and in the future by equipping them with adequate resources to help them move out of poverty. Among our community endeavors are educational assistance, reforestation, hospitalization, and many more.

Employees 404-3 Workforce is the primary channel of delivery of our services. We capacitate our people by regularly providing internal and external training, semestral performance appraisals, and competitive incentive schemes to encourage maximum productivity among staff. We hold weekly accountability groups and devotions to maintain healthy bonds and ensure that employees are looking out for one another, in an effort to instill solidarity within working groups.

Regulators We at KMBI give utmost respect to industry regulations. Regulators are set in place to manage microfinance operations in view of upholding the highest degree of ethical, moral, and corporate standards. We are committed to becoming responsive to the needs of the governing entities by keeping abreast of movements within the industry and securing compliance with local regulations.

MATERIAL TOPICS Material Topic: Human Rights and Labor Why this is material

Material Aspects

GRI

Description

Aspect

Indicator

Remarks

Boundary

Our core values mirror

Employment

401-2

No. of employees hired in 2020

Internal

See page 23

our love for fellowmen.

Labor Management/

402-1

Advisory on operational changes

Internal

Announced during 2019

With no respect to age, gender, religion,

Relations

or culture, we strive

Diversity

to promote inclusion, solidarity, and equal growth among our employees.

General Assembly 405-1

No. of employees by gender and

Internal

See page 23

employee category

and Equal Opportunity

405-2

Ratio of salary distribution by gender

Internal

See page 23

Non-

406-1

Incidents of employee discrimination

Internal

No incidents reported

Child Labor

408-1

Cases of child labor

Internal

No incidents reported

Forced or

409-1

Incidents of forced or involuntary

Internal

No incidents reported

Internal

No violations reported

Aspect

Remarks

discrimination

servitude

Compulsory Labor Rights of

411-1

Violation of indigenous peoples’ rights

Indigenous Peoples

Material Topic: Local Communities Why this is material

Material Aspects

GRI

Description

Indicator The organization’s

Local

approach to

Communities

413-1

Boundary Operations with local community

Internal and

engagement, impact assessments,

external

See page 25

and development programs

development is holistic, thus engagement

413-2

and impact to the communities where

Operations with significant actual

Internal and

and potential negative impacts on

external

See page 25

local communities

it operates are vital in the achievement of its objectives

Material Topic: Product Responsibility Why this is material

Material Aspects

GRI

Description

Aspect

Indicator We place high regard to our Program Members by making sure that our products and services are presented with utmost honesty and integrity and delivered exactly in the way they

Consumer Health and Safety Marketing

416-2

417-2

Communications 404-3

Remarks

Boundary Non-compliance with safety impacts

Internal and

No incidents of non-

of services

External

compliance reported

Non-compliance on service informa-

Internal and

No incidents of non-

tion and labeling

External

compliance reported

Non-compliance concerning

Internal and

No incidencec of non-

marketing and communications

External

compliance reported

are intended.

KMBI 2020 Integrated Annual and Sustainability Report

29

Material Topic: Product Responsibility Why this is material

Material Aspects

GRI

Description

Indicator We continuously exhibit responsiveness to

Data Privacy

418-1

emerging trends in the microfinance industry.

Aspect

Remarks

Boundary Complaints on Data

Internal and

Privacy Breaches

External

Legal actions for anti-

External

No complaints received

We constantly update our policies and processes in order to keep our compliance with regulators. This is also our way of safeguarding our stakeholders from exposure to unforeseen risks.

Anti-competitive

206-1

behavior

competitive behavior

No reports of anti-competitive behavior

Material Topic: Indirect Impact Why this is material

Material Aspects

As an MF NGO, the organization is interested in a

Indirect Economic

broader perspective of economic development,

Impacts

GRI

Description

Indicator 203-2

Aspect

Remarks

Boundary Significant indirect

Internal and

economic impacts

External

Description

Aspect

See page 12-13

aspiring to help promote national and international agenda especially those related to poverty alleviation and financial inclusion.

Material Topic: Training and Education Why this is material

Material Aspects

GRI Indicator

Human Capital is one of our most important

Training and

assets; continuous improvement through

Education

404-1

Conduct of employee

Internal

assessment or

training and education is both a need and a

Remarks

Boundary Semestral, 100% of staff evaluated

performance evaluation

responsibility of the organization.

404-2

Programs for upgrading

Internal

See page 23

Internal

See page 23

Aspect

Remarks

employee skills and transition assistance programs 404-3

Average hours of training per yer per employee

Material Topic: Economic Why this is material

Material Aspects

GRI

Description

Indicator A good financial performance is a

Economic

manifestation of our ability to effectively

Performance

201-1

Boundary Direct economic

Internal

See page 18

Internal

See page 7

Financial assistance

Internal and

No financial assistance

received from

External

received

Aspect

Remarks

value generated and

render non-financial services, such as values

distributed

formation and capacity building, to our

201-3

Program Members.

Defined benefit plan obligations and other retirement plans

201-4

government

Material Topic: Environment Why this is material

Material Aspects

GRI

Description

Indicator Our approach to holistic transformation

Biodiversity

304-3

encompasses environment as one of our integral dimensions. We develop initiatives that will not only benefit the environment, but also generate sustainable living for people living in adjacent areas.

30

KMBI 2020 Integrated Annual and Sustainability Report

Boundary Habitats Protected and

Internal and

Restored

external

See page 7

PARTNERS AND AFFILIATIONS 102-13

NGOs and other Networks • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •

Ahon sa Hirap, Inc. (ASHI) Alalay sa Kaunlaran, Inc. (ASKI) Asia-Pacific Rural and Agricultural Credit Association (APRACA) APRACA - CENTRAB APPEND Inc. ASA Philippines Foundation Asian School of Development and CrossCultural Studies Asian Theological Seminary Banko Sentral ng Pilipinas, Pia Bernadette Roman Banking with the Poor Bicol Microfinance Council, Inc. Canvas.ph Center for Agriculture and Rural Development Mutually Reinforcing Institutions (CARD MRI) Center for Community Transformation (CCT) Community Economic Ventures, Inc. (CEVI) ECLOF Philippines Katuwang Resource Center, Inc. (KRCI) Management Association of the Philippines (MAP) MBSsolve Insurance Agency, Inc. Microfinance Council of the Philippines, Inc. (MCPI) Microfinance Information Data Sharing Inc. (MiDAS) Microfinance NGO Regulatory Council Mindanao Microfinance Council Negros Women For Tomorrow Foundation, Inc. (NWTF) Nickosia Opportunity-Kauswagan Bank, Inc. (OK Bank) People’s Alternative Livelihood Microfinance Foundation of Sorsogon, Inc. (PALMFSI) Pinoy Ako Insurance Services (PAIS) Philippine Society for Training and Development Rangtay sa Pagrang-ay, Inc. (RSPI) Resources for the Blind REACH, Inc. Taytay sa Kauswagan, Inc. (TSKI) Talete King Panyulung Kapampangan, Inc. Foundation

Program Partners and Service Providers • • • • • • • • • • • • • • • • • • • • •

Ang Hortaleza Foundation Bayan Academy BPI Sinag Collins International Trading Corporation First Life Financial Company, Incorporated For His Glory Multipurpose Cooperative Habitat for Humanity Intellicare (HMO Provider) International Labor Organization (ILO) KPMG Manulife Philippine Bible Society Park Inn by Radisson North Edsa Rayel and Butuyan Law Offices Sequoia Hotel Seda Vertis North SNS Security Services Standard Insurance SUN Cellular Sunking. Greenlight Planet Water.org

Banks • • • • •

Bank of Commerce Philippine Business Bank Philippine National Bank – Allied Producers Bank Security Bank Corporation / Savings

Local Government and Government Agencies • • • • • • • • • • • •

Mayor’s Office, Quezon City Mayor’s Office, Valenzuela Mayor’s Office, Caloocan Mayor’s Office, Manila Office of the Punong Barangay, Karuhatan Office of the Punong Barangay, South Triangle Bureau of Internal Revenue Securities and Exchange Commission TESDA Philhealth SSS Pag-ibig

KMBI 2020 Integrated Annual and Sustainability Report

31

WHERE WE SERVE

102-3, 102-4

HEAD OFFICE – VALENZUELA 12 San Francisco Street, Karuhatan, Valenzuela City, Metro Manila

PANIQUI Out of Town Annex Bldg. #538 A. Magallanes Street, Poblacion, Paniqui, Tarlac, Central Luzon

SAN JOSE 3/F Umerez Building Unit 24 A and B, Tungko Mangga, San Jose Del Monte City, Bulacan

HEAD OFFICE - QUEZON CITY 130 Panay Ave., cor Scout Albano, South Triangle, Quezon City, Metro Manila

TARLAC 2/F Unit 201 & 202 JTM Bldg. M. H. Del Pilar St. corner Zafiro Street, San Nicolas, Tarlac City, Tarlac

BALAGTAS #197 2/F Mc Arthur Buiding, Mc Arthur Highway, Wawa, Balagtas, Bulacan

TUGUEGARAO 2/F Unit 1&2 Editha Tuddao Bldg.

Campos St. College Ave. Corner Caritan Centro, Poblacion, Tuguegarao City, Cagayan Valley

STO DOMINGO 2/F, Delgado Pabello Bldg., #78 Provincial Road, Malasin, Sto. Domingo, Nueva Ecija

NOVALICHES #970 Room 302, 306-309 3/F Our Lady of Mercy Bldg. Quirino Hiway, Novaliches Proper, Quezon City, Metro Manila

SANTIAGO 3/F Psalm 23 Bldg. National Road, Victory norte, Santiago City, Isabela CAUAYAN 4/F Room 401, ClU Bldg. Maharlika Highway District II, District II, Cauayan City, Isabela SOLANO 2/F Unit Q kmci East Bldg.

National Highway, Roxas, Solano, Nueva Vizcaya LA UNION 3/F CJ Arch Corporation Building, Quezon Avenue, Brgy. 2, San Fernando City, La Union LAOAG Avenue West Gen. Luna corner Panganiban Street, Poblacion, Laoag City, Ilocos Norte ROSALES Unit 1 &2 RGT Building, Tomana East, Rosales, Pangasinan BAYAMBANG 2/F Lagoy’s Building, Zone VII, Bayambang, Pangasinan SAN CARLOS 2/F Jelines Building Palaris Street, Palaris, San Carlos City, Pangasinan DAGUPAN 2/F Producers Building Room 1&2 Burgos Street, Poblacion, Dagupan City, Pangasinan

32

MABALACAT #224 MBP Bldg, Unit 8 & 9, Mac Arthur Highway, Dau, Mabalacat, Pampanga ANGELES 2/F Eloisa Narsico Bldg., McArthur Hiway corner Magalang Rd., Sto Cristo, Angeles City, Pampanga SAN FERNANDO Unit 1-A 3/F U FIVE Bldg. Mac Arthur Highway, Dolores, San Fernando, Pampanga BALANGA 2/F Tuazon Bldg. Capitol Drive, San jose, Balanga, Bataan OLONGAPO G/F Rementilla Bldg. #1630 Rizal Avenue, East Tapinac, Olongapo City, Zambales IBA 2/F Unit 2B, 2B Supremebike Building, Magsaysay Highway, Zone 1, Iba, Zambales BALIWAG #1733, 3/F Writ Bldg. Ano Street corner Roberto Chico Street, Poblacion, Baliuag, Bulacan SAN MIGUEL 2/F Dona Amelia Bldg., Unit 5, Maharlika Highway, Camias, San Miguel, Bulacan GAPAN DPC Commercial Building Unit 102 corner Del corro and E. Jacinto, San Vicente, Gapan City, Nueva Ecija

KMBI 2020 Integrated Annual and Sustainability Report

QUEZON CITY 1 #17 A&S Building Unit 401 and 402 Don Antonio Drive, Holy Spirit, Quezon City, Metro Manila WEST AVENUE #68 Unit F 3/F Cabral Bldg. West Avenue, West Triangle, Quezon City, Metro Manila VALENZUELA #12 San Francisco Street, Karuhatan, Valenzuela City, Metro Manila MANILA UGIC Tower # 503 5/F 682 & 684 Tomas Mapua Street, Sta Cruz, Manila City, Metro Manila MALIBAY #2755 3/F TRIM Bldg. Taft Avenue, Brgy. 84, Pasay City, Metro Manila BINAN 2/F Unit 3 RK2 Building National Highway, San Vicente, Binan City, Laguna BACOOR 3/F O. M. V. Bldg. Blk. 12 Lot 13 & 14 Phase 2A, Avenida Rizal St. cor.

Evangelista St. Bahayang Pagasa Subd.,, Molino V, Bacoor City, Cavite TANZA 2/F VNR Building, Unit D & E, Daang Amaya 3, Tanza, Cavite

UPPER CAVITE 2/F RCS Bldg. Old Carmona Road, Sampaloc 1, Pala Pala, Dasmarinas City, Cavite

TANAUAN 2/F R Venue Building, Unit 10 & 11 Avelino Street, Brgy. 3, Tanuan City, Batangas

BACOLOD 3/F VSB Bldg. RM. 302-303, 7th Lacson Street, Brgy. 7, Bacolod City

MENDEZ #126 3/F JLC Bldg Unit 2, Aguinaldo Highway, Mendez, Tagaytay City, Cavite

NAGA 2/F Prieto Bldg. Unit 2, Panganiban Drive, Dinaga, Naga City, Camarines Sur

KABANKALAN 2/F Jomabo Bldg Door 2, Guanzon Street, Brgy. 3, Kabankalan City

ANTIPOLO #354 E & E Bldg 2/F Room 1, M. L. Quezon Street, San Roque, Antipolo City, Rizal

DAET 2/F Lacson Bldg. Governor Panotes Avenue, Brgy 7, Daet, Camarines Norte

BAYAWAN 3/F Canamaque Building, Unit 1, Peping Gamo Street, Tinago, Bayawan City

ANGONO 3/F Aurora Building Quezon Avenue, San Isidro, Angono, Rizal

GOA 2/F Bentoy Square Bldg. Unit 2-A, 2-C 2-D, San Jose Street, San Jose, Goa, Camarines Sur

CADIZ 2/F Avon Bldg. Juan Luna Street, Poblacion 4, Cadiz City

PASIG 2/F One De Castro Building, De Castro Avenue, De Castro Subdivision, Sta Lucia, Pasig City BINANGONAN 2/F Rainbowshine Bldg.Quarry Road, Pantok, Binangonan, Rizal TANAY #19 J. M. Catolos Street, Katbayani, Tanay, Rizal SAN MATEO #526 Judge Noe Amado Bldg.

Gen Luna Street, Malanday, San Mateo, Rizal CALAMBA 2/F Auyonick Bldg. National Highway, Parian, Calamba City, Laguna SANTA CRUZ 2/F E.N Building, P Burgos Street, Poblacion, Sta Cruz, Laguna SAN PABLO 2/F Rosanes Bldg., M. Leonor Street, Brgy. 2E, San Pablo City, Laguna LUCENA #28 3/F Edzen Bldg. Enverga Street, Brgy. 3, Lucena City, Quezon LIPA #18 2/F MA and H Bldg. C. M. Recto Avenue, Brgy. 9, Lipa City, Batangas BATANGAS 2/F Blay Dela Roca Building, Unit 3, Calicanto, Batangas City

IRIGA LT Bldg., Lot2-A Gonzales Street, San Francisco, Iriga City, Camarines Sur LIGAO 3/F Cate’s Bldg unit 1&2., Mabini Street, Bagumbayan, Ligao City, Albay TABACO G/F Caño bldg., A.A Berces St.,, San Juan, Tabaco City, Albay MANDAUE 4/F Cotiaoking Bldg. North Road, Tabok, Mandaue City, Cebu LAPU LAPU 2/F M&Y Realty Building Unit 1,, 3H Basak, Lapu Lapu City TALISAY 2/F South Agora Bldg.Unit C 201, P. Deiparine Street, Tabunok, Talisay City, Cebu CEBU NORTH 4/F Martinez Bldg. Unit 404, Jones Avenue, Sta Cruz, Cebu City CARCAR Valencia Bldg. P. Burgos Street, Poblacion II, Carcar City, Cebu DANAO 3/F VAM Bldg. Pio Del Pilar Street, Poblacion, Danao City, Cebu BOGO Ningning Bldg. Unit N1, Bogo Business Park P. Rodriguez Street, La Purisma, Bogo City, Cebu

DUMAGUETE 3/F Rolcien Bldg. Dr. A. Aldecoa Drive, Daro, Dumaguete City BAIS 2/F Susana Pedrajas Bldg. Door 2, Juan Luna Street, Brgy. 2, Bais City ROXAS 2/F Hernandez Bldg. Roxas Avenue, Brgy. IX, Roxas City, Capiz PASSI 2/F Deza Building, Man-It, Passi City, Iloilo KALIBO #14 2/F Gutladera Bldg. Quezon Avenue, Estancia, Kalibo, Aklan CATICLAN 4/F HM Bldg.,Rm. 5&6, , Caticlan, Malay, Aklan OTON 3/F Silla Bldg.,Mabini Street, Poblacion, Oton, Iloilo GENERAL SANTOS 1 2/F GP Johnston Bldg. Door 206-207 Magsaysay Avenue, Dadiangas South, General Santos City GENERAL SANTOS 2 2/F Benjamin Napala Bldg.

Magsaysay Avene, Dadiangas East, General Santos City TACURONG 2/F Le Gre Bldg. National Highway, Poblacion, Tacurong City, Sultan Kudarat

KMBI 2020 Integrated Annual and Sustainability Report

33

KIAMBA Lopez Street, Purok Bougainvilla, Poblacion, Kiamba City MAASIM Hyra Mae Alvarez Residence, Colon, Maasim, SURALLAH Purok Maligaya Zone 3, Libertad, Surallah, South Cotabato KORONADAL G/F Lucky Five Bldg. Abad Santos Street corner Arellano, Zone 3, Koronadal City, South Cotabato TAGUM 2/F Suarez Bldg. Door 12-A Mabini Street, Magugpo South, Tagum City, Davao Del Norte

CANTILAN Unit Joseph Cotares Residence, Purok 2, Oritz Street, Magosilom, Cantilan, Surigao Del Sur

KABACAN 2/F Melais Bldg. Door 1,2,3, Mantawil Street, Poblacion, Kabacan City

MANGAGOY G/F CAP Bldg. corner M. Castillo Abarca Street, Mangagoy, Bislig City, Surigao Del Sur

MIDSAYAP 2/F LLL Tarongoy Bldg. Door 2, Sto Nino Street, Poblacion 6, Midsayap, Cotabato

BAROBO Unit 2/F Zita Bldg., Purok 1, Poblacion, Barobo, Surigao Del Sur

VALENCIA 2/F Quality Appliances Bldg. T. N. Pepito Street, Poblacion, Valencia City, Bukidnon

SAN FRANCISCO 3/F Balaba Realty Bldg., Brgy. 2, San Francisco, Agusan Del Sur TRENTO Offiste 2/F YRA Business Center, Poblacion, Trento, Agusan Del Sur

MARAMAG Bamboo Building, Poblacion 6 North, Maramag, Bukidnon MALAYBALAY 2/F MRMA Bldg. Fortich Street, Brgy. 7, Malaybalay, Bukidnon

NABUNTURAN 2/F Junora Property Building Door 1, Purok 7, Poblacion, Nabunturan, Compostella Valley

BAYUGAN D 2/F HED Bldg. oor 5 & 6, Purok 6, Crossing, Maygatasan, Bayugan City, Agusan Del Sur

MATI 2/F Ville Bldg. Door #4 Madang Street, Centro, Mati City, Davao Oriental

BUTUAN 3/F Cesia Bldg. Room 2 &3, Montilla Boulevard, Dagohoy, Butuan City, Butuan

LUPON G/F Lamanillao Bldg. Unit 1 Market Avenue, Poblacion, Lupon, Davao Oriental

GINGOOG 2/F Nadal Bldg., Door# 11CB National Highway, Brgy. 4, Gingoog City, Misamis Oriental

METRO DAVAO 1 2/F VAB Bldg. Mac Arthur Hi-way, Ulas, Davao City, Davao Del sur

SURIGAO 2/F Bullo Building Bldg. Unit 2, Km 1 National Road, Washington, Surigao City, Surigao del Norte

BALINGASAG #15 2/F Johnny Co Bldg. Rm 1-2 De Septiembre Street, Linggangao, Balingasag

PLACER 2/F Gonzafa Residence, Unit 2, Purok 3, Sta Cruz, Placer, Surigao Del Norte

DIPOLOG 3/F Jerry Logemann Bldg. Mabini Street, Biasong, Dipolog City, Zamboanga Del Norte

KIDAPAWAN 2/F MJ Bldg. P-2, Magsaysay, Kidapawan City, Cotabato

PAGADIAN 2/F Malalis-Nasiad Bldg., V. Cerilles, Santiago, Pagadian City, Zamboanga Del Sur

METRO DAVAO 2 2/F Bernardo Bldg., A. Bonifacio Street, Brgy. 4-A, Davao City SAMAL 2/F Samal City One Building, Miranda-Pichon, Samal City, Davao Del Norte PANABO UNIT #1443 Ybanez Subdivision, Purok Tambis, Sto Nino, Panabo, Davao Del Norte TIBUNGCO UNIT Tubungco Town Center Unit 4, Iliong, Tibungco, Davao Del Norte TANDAG 2/F WM Bldg. Door 5 & 6, National Hi-way La Suerte, Dagocdoc, Tandag City, Surigao del Sur

34

ANTIPAS Melanie Gabriel Trinidad Residence, Don Mariano Marcos Street, Poblacion, Antipas DIGOS 2/F JMC Bldg. Rizal Avenue, Zone 2, Digos City, Davao Del Sur MALITA Glorofredo Balane Residence, Tugas Street, Poblacion, Malita

KMBI 2020 Integrated Annual and Sustainability Report

CDO 1-CARMEN 2/F ADM Bldg. Door 1, Max Suniel St. Cor V. Neri Street, Carmen, Cagayan De Oro City ILIGAN 2/F RACS Piazza Room 205, Badelles St., Ext, Mahayahay, Iligan City, Lanao Del Norte CDO 2-PUERTO 2/F Hill Point Business Center Unit 4 & 5, Puerto, Cagayan De Oro

ZAMBOANGA 2/F Goodwill Center Bldg.Mayor Jaldon St., Canelar, Zamboanga City, Zamboanga Del Sur OZAMIZ 3/F Carlos V. Pormento Building, Door E, Valconcha Road, Don Gallardo Street, 50th District, Ozamis City, Misamis Occidental

GRI INDEX CHECKLIST GRI Standard

Disclosure

Page number

Omission

General Disclosures GRI 102: General Disclosures 2020

102-1 Name of the Organization 102-2 Activities, brands, products, and services 102-3 Location of headquarters 102-4 Location of operations 102-5 Ownership and legal form 102-6 Markets served

Cover page 18-19 31 31-33 KMBI is a non-stock, non-profit MF-NGO 31-33

102-7 Scale of the organization

16

102-8 Information on employees and other workers

25

102-9 Supply chain

27

102-10 Significant changes to the organization and its supply chain

No significant changes

102-11 Precautionary Principle or approach

No applicable context that requires precautionary principle or approach

102-12 External initiatives

KMBI subscribes to USSPM, CPP, Data Privacy Act, TLA, RA 10693, OSH, Bayanihan Act 2, local and international COVID-19 adhered protocols

102-13 Membership of associations

30

102-14 Statement from senior decision-maker

4-5

102-15 Key impacts, risks, and opportunities

5

102-16 Values, principles, standards, and norms of behavior

2

102-18 Governance Structure 102-40 List of Stakeholder Groups

6-11 27

102-41 Collective bargaining agreements

GRI 102: General Disclosures 2020

No collective bargaining agreements reported

102-42 Identifying and selecting stakeholders

27

102-43 Approach to stakeholder engagement

27

102-44 Key topics and concerns raised

Currently not included in this report; development of process is underway

102-45 Entities included in the consolidated financial statements

No entity included

102-46 Defining report content and topic Boundaries

28-29

102-47 List of material topics

28-29

102-48 Restatements of information

Page 16-17

102-49 Changes in reporting

No significant changes in reporting

102-50 Reporting period

January to December 2020

102-51 Date of most recent report

July 2020

102-52 Reporting cycle

Annual

102-53 Contact points for questions regarding the report

3

102-54 Claims of reporting in accordance with the GRI Standards

3

102-55 GRI content index

34

102-56 External assurance

No external assurance

Material Topics Economic GRI 103: Management Approach 2020

103-1 Explanation of the material topic and its Boundaries

28

103-2 The management approach and its components

28

GRI 201: Economic Performance

201-1 Direct economic value generated and distributed

16-17

201-3 Defined benefit plan obligations and other retirement plans 201-4 Financial assistance received from government

7 Social Amelioration Program

KMBI 2020 Integrated Annual and Sustainability Report

35

GRI Standard

Disclosure

Page number

GRI 202: Market Presence

202-1 Ratios of standard entry level wage by gender compared to local minimum wage

GRI 203: Indirect Economic Impacts

203-2 Significant indirect economic impacts

21, 24

103-1 Explanation of the material topic and its Boundaries

26, 29

Omission

25

Regulatory Compliance GRI 103: Management Approach 2020

103-2 The management approach and its components

28-29

GRI 206: Anticompetitive Behavior

206-1 Legal actions for anti-competitive behavior, anti-trust, and monopoly practices

28-29

GRI 307: Environmental Compliance

307-1 Non-compliance with environmental laws and regulations

No incidents of non-compliance reported

GRI 416: Customer Health & Safety

416-2 Incidents of non-compliance concerning the health and safety impacts of products and services

No incidents of non-compliance reported

GRI 417: Marketing & Labeling

417-2 Incidents of non-compliance concerning product and service information and labeling

No incidents of non-compliance reported

417-3 Incidents of non-compliance concerning marketing communications

No incidents of non-compliance reported

Environment GRI 103: Management Approach 2020

103-1 Explanation of the material topic and its Boundaries

28-29

103-2 The management approach and its components

28-29

103-1 Explanation of the material topic and its Boundaries

28-29

103-2 The management approach and its components

28-29

Human Rights and Labor GRI 103: Management Approach 2020 GRI 401: Employment

401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees

Rice subsidy, allowances, leave credits, company uniform, health maintenance organization (HMO)

GRI 402: Labor/ Management Relations

402-1 Minimum notice periods regarding operational changes

KMBI cascades operational changes during the yearly General Assemblies

GRI 404: Training and Education

404-1 Average hours of training per year per employee

25

404-2 Programs for upgrading employee skills and transition assistance programs

25

404-3 Percentage of employees receiving regular performance and career development reviews

25

GRI 405: Diversity and Equal Opportunity

405-1 Diversity of governance bodies and employees

25

405-2 Ratio of basic salary and remuneration of women to men

25

GRI 406: Nondiscrimination

406-1 Incidents of discrimination and corrective actions taken

No incidents of discrimination reported

GRI 408: Child Labor

408-1 Operations and suppliers at significant risk for incidents of child labor

No incidents of child labor reported

GRI 409: Forced or Compulsory Labor

409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor

No incidents of forced or compulsory labor reported

GRI 411: Rights of Indigenous Peoples

411-1 Incidents of violations involving rights of indigenous peoples

No incidents of violation of indigenous peoples’ rights

GRI 413: Local Communities

413-1 Operations with local community engagement, impact assessments, and development programs

24

103-1 Explanation of the material topic and its Boundaries

25

103-2 The management approach and its components

29

Spiritual GRI 103: Management Approach 2020

36

KMBI 2020 Integrated Annual and Sustainability Report

KABALIKAT PARA MAUNLAD BUHAY, INC. MICROFINANCE NGO) KABALIKAT PARA SASA MAUNLAD NANA BUHAY, INC. (A(A MICROFINANCE NGO) Non‐stock, Non‐profit Organization) (A (A Non‐stock, Non‐profit Organization) KABALIKAT PARA SA MAUNLAD NA BUHAY, INC. (A MICROFINANCE NGO) (A Non‐stock, Non‐profit Organization) STATEMENT ASSETS, LIABILITIES AND FUND BALANCE STATEMENT OFOF ASSETS, LIABILITIES AND FUND BALANCE DECEMBER 31, 2019 DECEMBER 2019 STATEMENT OF ASSETS,31, LIABILITIES AND FUND BALANCE (With Comparative Figures 2018) (With Comparative Figures forfor 2018) DECEMBER 31, 2019 (With Comparative Figures for 2018) Note Note ASSETS ASSETS ASSETS Current Assets Current Assets

Cash and cash equivalents Cash and cash equivalents Current Assets Loans and other receivables Loans and other receivables Cash and cash equivalents Other current assets Other current assets Loans and other receivables Total Current Assets Total Current Assets Other current assets Total Current Assets Noncurrent Assets Noncurrent Assets Financial assets atAssets fair value through other Financial assets at fair value through other Noncurrent comprehensive income (FVOCI) comprehensive income (FVOCI) Financial assets at fair value through other Property and equipment income (FVOCI) Property and equipment comprehensive Intangible assets Intangible assets Property and equipment Other noncurrent assets Other noncurrent assets Intangible Total Noncurrent Assets Total Noncurrent Assets Other noncurrent assets Total Noncurrent Assets

LIABILITIES AND FUND BALANCE LIABILITIES AND FUND BALANCE LIABILITIES AND FUND BALANCE Current Liabilities Current Liabilities

Trade and other payables Trade and other payables Current Liabilities Capital build‐up Capital build‐up Trade and other payables Provision probable losses Provision forfor probable losses Capital build‐up Lease liabilities ‐ current portion Lease liabilities ‐ current portion Provision for probable losses Income payable ‐ current portion Income taxtax payable Lease liabilities

Note

2019 2019

2019

2018 2018

2018

4 4 5 5 6 6

P =96,156,937 P P =105,765,494 P =96,156,937 =105,765,494 1,147,399,292 1,026,123,297 1,026,123,297 4 1,147,399,292 P =96,156,937 P =105,765,494 18,575,833 13,852,616 18,575,833 13,852,616 5 1,147,399,292 1,026,123,297 1,262,132,062 1,145,741,407 1,145,741,407 6 1,262,132,062 18,575,833 13,852,616 1,262,132,062 1,145,741,407

7 7 8 8 9 9 10 10

11,120,269 10,997,653 10,997,653 11,120,269 160,610,367 124,308,074 124,308,074 7 160,610,367 11,120,269 10,997,653 935,538 1,455,677 935,538 8 160,610,3671,455,677 124,308,074 53,773,389 53,959,561 53,773,389 53,959,561 9 935,538 1,455,677 226,439,563 190,720,965 190,720,965 10 226,439,563 53,773,389 53,959,561 226,439,563 190,720,965 P =1,488,571,625P P =1,336,462,372 P =1,488,571,625 =1,336,462,372 P =1,488,571,625 P =1,336,462,372

P =48,909,596 P P =43,693,237 11 11 P =48,909,596 =43,693,237 593,539,879 543,806,012 12 12 11 593,539,879 543,806,012 P =48,909,596 P =43,693,237 180,624,765 174,268,339 23 23 12 180,624,765 174,268,339 593,539,879 543,806,012 22 19,790,807 22 19,790,807 – – 23 Annual and 180,624,765 174,268,339 KMBI 2020 Integrated Sustainability Report 37 3,868,820 3,540,849 3,868,820 22 19,790,8073,540,849 –

KABALIKAT PARA SA MAUNLAD NA BUHAY, INC. (A MICROFINANCE NGO) (A Non‐stock, Non‐profit Organization)

STATEMENTS OF ASSETS, LIABILITIES AND FUND BALANCE

Note

December 31 2020 2019

ASSETS Current Assets Cash and cash equivalents Loans and other receivables Other current assets Total Current Assets Noncurrent Assets Financial assets at fair value through other comprehensive income (FVOCI) Investment in an associate Property and equipment Intangible assets Other noncurrent assets Total Noncurrent Assets

4 5 6

P =124,710,361 1,047,273,080 16,672,705 1,188,656,146

P =96,156,937 1,147,399,292 18,575,833 1,262,132,062

7 8 9 10 11

11,122,445 4,000,000 137,721,380 336,030 53,881,662 207,061,517

10,720,269 – 160,610,367 935,538 54,173,389 226,439,563

P =1,395,717,663

P =1,488,571,625

12 13 23 22

P =42,585,030 599,175,244 180,624,765 21,648,380 2,700,498 846,733,917

P =48,909,596 593,539,879 180,624,765 19,790,807 3,868,820 846,733,867

20 22 21

82,958,210 10,343,479 198,314 93,500,003 940,233,920

65,013,109 16,052,255 293,570 81,358,934 928,092,801

358,146,883

457,051,559

20

97,618,794

104,111,375

7

(281,934) 455,483,743

(684,110) 560,478,824

P =1,395,717,663

P =1,488,571,625

LIABILITIES AND FUND BALANCE Current Liabilities Accounts and other payables Capital build‐up Provision for probable losses Lease liabilities ‐ current portion Income tax payable Total Current Liabilities Noncurrent Liabilities Net retirement benefit liability Lease liabilities ‐ net of current portion Net deferred tax liability Total Noncurrent Liabilities Total Liabilities Fund Balance General fund Cumulative remeasurement gains on net retirement benefit liability Cumulative unrealized losses on financial assets at FVOCI Total Fund Balance

See accompanying Notes to Financial Statements.

38

KMBI 2020 Integrated Annual and Sustainability Report

KABALIKAT PARA SA MAUNLAD NA BUHAY, INC. (A MICROFINANCE NGO) (A Non‐stock, Non‐profit Organization)

STATEMENTS OF COMPREHENSIVE INCOME

Note REVENUES Interest income on loans receivable Service income Other income EXPENSES Operating expenses Administrative expenses Program expenses Impairment losses on financial assets Interest expense Foreign exchange loss Provision for probable losses

5 15 16

P =452,280,161 52,262,530 1,546,542 506,089,233

P =683,609,711 81,381,569 2,069,216 767,060,496

17 18 19 5 13

442,722,447 99,866,890 9,725,640 32,157,260 9,998,009 427,763 – 594,898,009

474,641,201 161,502,446 33,397,126 17,066,279 14,695,999 278,271 6,356,426 707,937,748

(88,808,776)

59,122,748

10,095,900

15,580,204

(98,904,676)

43,542,544

(6,492,581) 402,176 (6,090,405)

(6,595,143) 122,616 (6,472,527)

(P =104,995,081)

P =37,070,017

23

INCOME (LOSS) BEFORE INCOME TAX INCOME TAX EXPENSE

21

NET INCOME (LOSS) OTHER COMPREHENSIVE INCOME (LOSS) Not to be reclassified to profit or loss in subsequent periods Remeasurement loss on net retirement benefit liability Unrealized gain on financial assets at FVOCI TOTAL COMPREHENSIVE INCOME (LOSS)

Years Ended December 31 2020 2019

20 7

See accompanying Notes to Financial Statements.

KMBI 2020 Integrated Annual and Sustainability Report

39

40

KMBI 2020 Integrated Annual and Sustainability Report

See accompanying Notes to Financial Statements.

Balances as at December 31, 2018 Net income Other comprehensive income (loss): Remeasurement loss on net retirement benefit liability Unrealized gain on financial assets at FVOCI Balances as at December 31, 2019

Balances as at December 31, 2019 Net loss Other comprehensive income (loss): Remeasurement loss on net retirement benefit liability Unrealized gain on financial assets at FVOCI Balances as at December 31, 2020

20 7

– – P =358,146,883

20 7

– – P =457,051,559

P =413,509,015 43,542,544

General Fund P =457,051,559 (98,904,676)

Note

(6,595,143) – P =104,111,375

P =110,706,518 –

(6,492,581) – P =97,618,794

– 122,616 (P =684,110)

(P =806,726) –

– 402,176 (P =281,934)

(6,595,143) 122,616 P =560,478,824

P =523,408,807 43,542,544

(6,492,581) 402,176 P =455,483,743

Cumulative Cumulative Remeasurement Unrealized Gains (Losses) on Gains (Losses) Net Retirement on Financial Assets Benefit Liability at FVOCI Total Fund Balance P =104,111,375 (P =684,110) P =560,478,824 – – (98,904,676)

STATEMENTS OF CHANGES IN FUND BALANCE

(A Non‐stock, Non‐profit Organization)

KABALIKAT PARA SA MAUNLAD NA BUHAY, INC. (A MICROFINANCE NGO)

KABALIKAT PARA SA MAUNLAD NA BUHAY, INC. (A MICROFINANCE NGO) (A Non‐stock, Non‐profit Organization)

STATEMENTS OF CASH FLOWS

Note CASH FLOWS FROM OPERATING ACTIVITIES Income (loss) before tax Adjustments for: Depreciation and amortization Impairment losses on financial assets Retirement benefit costs Rent concession Unrealized foreign exchange loss Gain on disposal of property and equipment Provision for probable losses Operating income before working capital changes Decrease (increase) in: Loans and other receivables Other current assets Other noncurrent assets Increase (decrease) in: Accounts and other payables Capital build‐up Net cash generated from operations Income taxes paid Retirement benefits paid Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions of: Property and equipment Investment in an associate Intangible assets Proceeds from disposal of property and equipment Net cash used in investing activities CASH FLOW FROM A FINANCING ACTIVITY Lease payments

9 5 20 22 16 23

9 8 10 9

Years Ended December 31 2020 2019 (P =88,808,776)

P =59,122,748

55,871,771 32,157,260 12,202,020 (2,226,314) 427,763 (40,905) – 9,582,819

48,528,982 17,066,279 10,956,798 – 278,271 (572,972) 6,356,426 141,736,532

67,968,952 1,903,128 291,727

(138,342,274) (4,723,217) 186,172

(6,324,566) 5,635,365 79,057,425 (11,359,478) (749,500) 66,948,447

5,216,359 49,733,867 53,807,439 (15,242,623) – 38,564,816

(8,908,418) (4,000,000) – 488,098 (12,420,320)

(30,326,759) – (77,224) 870,725 (29,533,258)

(25,546,940)

(18,361,844)

(Forward)

KMBI 2020 Integrated Annual and Sustainability Report

41

42

KMBI 2020 Integrated Annual and Sustainability Report

See accompanying Notes to Financial Statements.

P =457,526,144 9,998,009

OPERATIONAL CASH FLOWS FROM INTEREST Interest received Interest paid

96,156,937

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

P =124,710,361

(427,763)

EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS AT END OF YEAR

P =28,981,187

P =684,080,246 14,695,999

P =96,156,937

105,765,494

(278,271)

(P =9,330,286)

Years Ended December 31 2020 2019

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

‐2‐

“Do not remember the former things, nor consider the things of old.

Behold, I will do a new thing, now it shall spring forth; Shall you not know it? I will even make a road in the wilderness and rivers in the desert.”

Isaiah 43:18-19

(A Microfinance NGO)

44

KMBI 2020 Integrated Annual and Sustainability Report