PSHF

Philippine Self-Help Foundation

Philippine Self-Help Foundation/Loan Impact Analysis

The loan impact appraisal covers 2002 to 2011. During this period, we have appraised 1,429 individual livelihood loans and 121 educational loans and given them rankings which you can find below.

ANALYSIS

The % of successful loans (A,B) for regular is 72%, and for education is 62%. Also compared to regular, education had proportionately twice as many loans categorised as E, with 20% of lenders really struggling to repay the loan. This demonstrates that educational loan lenders found it harder to repay their loans. Thinking back to our LPR of 85%. One could conclude that only 15% of lenders struggled to repay the loans. The above data represents a more accurate reality. In the case of Ed loans we can say that 38% (D,E,F and F*) of lenders really struggled to repay the PSHF loan.


Specific reasons for not repaying education?

We believe there are a few key factors that only 62% (A and B) of our students successfully graduate and find a job linked to their studies:

  • The first is pregnancy. Often female students become pregnant during their studies, forcing them to drop out.
  • The second is, unlike a business which is hopefully generating income, a students will not usually contribute until after graduation, after 4 years. And finally a lack of commitment from the student to finish college.


Common generic reasons for not repaying loans?

The list below will give you an insight into some of the common problems that our lenders face when repaying:

  • Break up of the family is a leading cause of unpaid loans.
  • Diversion of capital, the lenders not using the money on the decided project, leading to the waste of money.
  • Urgent medical expenses, if there‚Äôs a sudden illness in the family this can force families to dig into there savings.
  • A family has multiple debts, often other lenders are prioritised. PSHF has a softer approach compared to other local lenders.


Future Work

Fo further analysis we could compare ABC and D,E,F,F* loans. We could compare loan amount, business type, location of lender amor other variables to try and see any patterns in what makes a loan successful or unsuccessful. With respect to education we would be more confident in giving loans for 3rd or 4th year students, because the student has already showed an commitment and ability to finish there studies. It is also clear that if the students has a part time job, it puts less financial pressure on the family. Because of social status, families often want there child to study an academic subject. These are more expensive and longer than vocational subjects. PSHF would in some cases now encourage students to start with a 2 year vocational course. This puts less financial stress on the family, and allows the child to earn soon after finishing the degree. Then in the future if they want to re-educate themselves in a more academic degree, they could possibly do this part time.

Rank
 Livelihood
 Education
A
 39.6%
 33.9%
 B
22.1 %
 28.1%
 C
 10.0%
 _
 D
 3.7%
 2.5%
 E
 10.0%
 19.8%
 F
 9.4%
 5.8%
 F*
 5.2%
 9.9%
 LIA Ranking Table
Rank
 Description
 A

Contract based repayments, i.e no overdues or the loan was repaid within the contract period.

 B

The loan helped but the full payback was up to a year late.

 C

Loan eventually repaid but not from the proceeds of the business for which the loan was obtained.

 D

The loan helped but not in the intended way. The loan was repaid within the contract period.

 E
   The loan was eventually repaid or will most likely be repaid but it has been/is a struggle. A waived loan where 80% was repaid is in this category.
 F

Loan balance waived (under 80% payback). Also projects that did not pay back within 8 years or are unlikely to pay back.

 F*

The loan was approved more than 8 years ago and is still being repaid, albeit slowly.