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Defying the odds: How Jaime Alip’s microfinance dream turned into a multi-billion success while fighting poverty

By Eileen Mencias

Jaime Aristotle Alip had been told too many times that his vision of setting up a bank managed and run by the poor was a crazy idea.

Growing up, landless coconut farmers would often visit his house in San Pablo, Laguna, for breakfast and borrow money from his dad. His father would lend them money, well aware of the slim chances of being repaid. Sometimes, there wouldn’t be enough food for him, even for basic meals.

While he admired his father’s generosity, he knew it wasn’t sustainable, no matter how noble the intention, given the slim chances of repayment.

His revolutionary idea of lending money to the poor and establishing a bank for this purpose emerged after working with a non-government organization and coordinating with funding agencies in the 1980s. Having worked with funding agencies long enough, he knew that, regardless of how unconventional a proposal was, the Japanese agencies would provide a token amount just for the effort. Banking on this, he asked his father for money to fly to Japan to present his idea, and his gamble paid off.

In 1988, Alip initiated the microfinance project in Bay and San Pablo in Laguna with the $20,000 funding provided by the ASEAN Community Trust following his daring trip to Japan. More than three decades later, Alip’s mission to alleviate poverty in the country through sustainable microfinance has been a resounding success.

“The impression that the poor cannot pay, the poor cannot save, that’s been debunked. To me, just believe in them. As long as you give them the opportunity, you give them back their dignity, you bring back their confidence…that’s why our repayment rate till this day remains to be near perfect,” Alip said.

While he garnered support for the microfinance and poverty reduction efforts from funders in Australia, New Zealand, Germany, and the United States, few were convinced about establishing the bank. He turned down both offers, each amounting to $1 million, from two individuals who stipulated that he refrain from converting the microfinance project into a bank.

“While he garnered support for the microfinance and poverty reduction efforts from funders in Australia, New Zealand, Germany, and the United States, few were convinced about establishing the bank. Two individuals even offered $1 million each on the condition that he not convert the microfinance project into a bank, an offer he declined.

“I said this is difficult because that’s our promise to our members. We will be owners of the bank and I cannot renege on my commitment to them,” Alip recalled.

By then, he had already expanded their operations. Without the funding, the project’s reputation risked being compromised.

To ensure the project’s continuation, he borrowed against his inheritance from his father. The staff also contributed their savings, and they persevered.

“We’re here to prove the unprovable. To create a bank that is owned and managed by the poor. So, this is the time because we can mobilize our savings. When we were given a license to become the first microfinance-oriented bank in the country, the other funders came back,” Alip said.

He accepted their help, but only on his terms.

Today, CARD Mutually Reinforcing Institutions operate three banks: CARD Bank Inc., CARD SME Bank Inc., and CARD MRI Rizal Bank Inc. As of June 30, 2023, CARD Bank Inc.’s assets totaled P24.15 billion, making it the largest standalone rural cooperative bank. Its CARD MRI Rizal Bank had assets of P6.4 billion, ranking just four notches below CARD Bank Inc., and CARD SME Bank, a thrift bank, had total assets of P9.4 billion as of September 30, 2023.

Alip has come a long way since that day in 1988 when he flew to Japan with money from his dad to seek funding. Since then, he has redefined CARD’s mission.

“We’re not in the business of microfinance, microinsurance per se. We’re in the business of poverty eradication,” Alip said.

CARD MRI now encompasses 23 organizations, including its own business development services and IT group. It has its own pharmacy, insurance, and even a tourism and a film group.

“It’s an ecosystem,” he said.

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