Project 08pm-5119 - agro-info

08pm-5119 Attaining self-sustaining status and sustained growth

budget	€ 109.899,48	status	execution
start date	01-01-2008	date end	31-12-2009
location		country	philippines
financer	Agriterra
executor	Partnership Mutual Benefit Association	intervention level	sub-national
Programmes	\| work area 08: Banking and Credit sector (including Insurance) \| IFAP 08: Ensure secure access to resources \|
description	PMBA was founded by the Pambansang Kilusan ng mga Samahang Magsasaka (PAKISAMA) as a sister organization in August 17, 2002 at the Institute of Social Order in Ateneo De Manila University, Loyola Heights, Quezon City. The Mutual was established as a micro-insurance arm to serve the needs of (...more...)
description	PMBA was founded by the Pambansang Kilusan ng mga Samahang Magsasaka (PAKISAMA) as a sister organization in August 17, 2002 at the Institute of Social Order in Ateneo De Manila University, Loyola Heights, Quezon City. The Mutual was established as a micro-insurance arm to serve the needs of poor people, particularly members of PAKISAMA, and generally the rural poor who are generally left out by mainstream insurers. The PMBA is registered with the Securities and Exchange Commission (SEC) and duly licensed by the Insurance Commission (IC) as a mutual benefit association. The project introduced with Agriterra in 2008 is a continuation of the project executed in 2007. The key target outputs for the year are: • 7,000 total number of members/policyholders • No less than Php 2,350,000.00 Kapamilya premium collection • No less than Php 150,000.00 CLP premium collection In order to deliver these targets, the following major tasks and activities will be carried out: 1. Maintenance/expansion of existing accounts 2. Membership recruitment drive through community-based savings and credit organizations (Assisting Partners in establishing community-based savings-lending-insurance services in their areas of operation.) 3. Build new partnerships with local government units, putting into maximum use the initial break gained from the current partnership with the Congressional office of Honorable Dan Fernandez. 4. Updating and distribution of PMBA brochures and other marketing materials, including the PMBA website. (...less...)
results & observations	At the end of 2009, PMBA only managed to attain a total premium collection amounting to 314,701.38 (Philippine Peso) or 42% of the total target for the period. From the 2007 list of PMBA Partners, only a handful is still bringing in new policies and premium payments. At the end (...more...)
final results & observations	At the end of 2009, PMBA only managed to attain a total premium collection amounting to 314,701.38 (Philippine Peso) or 42% of the total target for the period. From the 2007 list of PMBA Partners, only a handful is still bringing in new policies and premium payments. At the end of the year, we have 705 active members/policyholders. Women homeworkers, farmers and small entrepreneurs in the rural areas are still the largest number (75%) of our members. In the past two years, the PMBA, from a being a “stand-alone” enterprise, built akin to a traditional sales and marketing organisation of a commercial insurance provider, is transitioning into a joint micro insurance program of several PO’s and NGO’s. This institutional arrangement entails that PMBA Partners are in-charge of membership enrolment from among their constituencies; assign their social protection/micro-insurance coordinator, and PMBA’s operations staff takes care of training, coaching and assisting said coordinator, equipping them with product knowledge and presentation skills/tools, and membership recruitment/processing, including setting up of premium collection and remittance system. Such being the case, PMBA is currently maintaining very lean operations and keep its expenses to a minimum. 2009 was the last year of financial and advisory support from Agriterra, as PMBA became an exit strategy based on the disappointed premium collection (not meeting the targets mentioned in the contract based on the business plan). Financial support 2009 enabled PMBA to meet outstanding commitments. (...less...)
specialisms	\| Institutional development \|

	APPLICATION
	APPLICATION

	DEFINITION
	DEFINITION

	EXECUTION
	EXECUTION

	RESULTS
	RESULTS

	PROGRESS
	PROGRESS

	RELATIONS
	RELATIONS

PROPOSAL

Agri-agency	Own contribution executor	Other parties	Total requested budget
Agriterra	PMBA
€ 0,00 + € 0,00	€ 0,00	€ 0,00	€ 0,00

The Pakisama Mutual Benefit Association (PMBA) was founded in 2002 with the objective to offer microinsurance products to members of Pakisama, the National Confederation of Peasant Organisation. The PMBA operates as a stand-alone microinsurance company, and as such officially registered with the Securities and Exchange Commission (SEC) and duly licensed by the Insurance Commission (IC) as a mutual benefit organisation. In 2007, the formal relationship with Pakisama was ended, and the name was changed into Partnership Mutual Benefit Association.

This project proposed for 2008 is a continuation of project 07pm-4904.

Since 2007 Agriterra supports this PO on the basis of a business plan. The net financial shortfall from micro-insurance operations is covered by Agriterra until the break even point will be reached. Micro-insurance consultants of the Dutch network MIAN have realised advisory missions.

2007 was the year for major changes in the PMBA: re-orientation of business strategies, organizational re-arrangements and the assumption of new leadership. Enhancement in the partnership building strategy of PMBA was also introduced towards the end of the year.

Total number of policyholders in 2007 were lower than expected. However, PMBA essentially managed to deliver the total premium collection target. Total premiums collected in 2007 amounts 98% of the total target for the year as committed to Agriterra. The PMBA managed to keep the operational expenses down, and increased the Reserved/Guarantee fund.

A major realization of the PMBA is that micro-insurance alone is an inadequate financial service for the rural and urban poor constituent/target market of the PMBA and many of its Partners. Kapamilya will have to be bundled with savings and credit products of community-based cooperatives and/or ROSCAs (rotating savings and credits associations) in order to ensure a “captive market” and sustained/stable membership for the PMBA. “Community-based” referred herein are local community organizations (in the form of cooperative or ROSCAs) owning, controlling and managing savings-based microfinance business enterprises, partnering with the PMBA for micro-insurance services.

Bundling the insurance products with savings and credit services is more feasible with savings and credit associations/cooperatives that are organized under the auspices of the PMBA and its Partners. It is unlikely that PMBA will be able to attract medium and large lending organizations, especially those which are doing “in-house insurance”, to enter into Partnership with the PMBA. The challenge for PMBA is to be able to identify and respond to the needs of these types of lending organizations so that they can get them to join hands with the Mutual.
In the short term i.e. from 2008 to end of 2010, the PMBA should be able to attain a self-sustaining status or very near it. This would mean reaching the business’ break-even point, requiring very minimal external funding. In the long-term, i.e. in the coming fifteen years, the PMBA should be able to attain a sustained growth measured in financial strength and membership base.

The key target outputs for the year are: (See attached worksheet: 2008 membership and premium collection targets.)
• 7,000 total number of members/policyholders
• No less than Php 2,350,000.00 Kapamilya premium collection
• No less than Php 150,000.00 CLP premium collection

In order to deliver these targets, the following major tasks and activities will be carried out:

1. Maintenance/expansion of existing accounts
2. Membership recruitment drive through community-based savings and credit organizations (Assisting Partners in establishing community-based savings-lending-insurance services in their areas of operation.
3. Build new partnerships with local government units, putting into maximum use the initial break gained from the current partnership with the Congressional office of Honorable Dan Fernandez.
4. Updating and distribution of PMBA brochures and other marketing materials, including the PMBA website.

The achievement of the above target activities and outputs shall be complemented by the following administrative/management support and leadership actions:
1. Fulfillment of reportorial and licensing requirements by relevant regulatory Philippine agencies: IC, SEC, BIR and local governments
2. Preparation and submission of project reports to Agriterra
3. Conduct of BoT meetings and the annual National Convention
4. Conduct of bi-annual Operations Team evaluation and operations planning workshops
5. Institution of monitoring and control system
6. Conduct of staff development seminars
7. Updating MIS software (OASE) to make it more appropriate and adequate to the needs of PMBA
8. Regular communication with Agriterra consultants.

The budget consists of a previsional profit and loss statement, in which income from premium collection is balance with operational expenses. The shortfall is covered by Agriterra support: € 51.433 in 2008.

The indicators are derived from the business plan and linked to the expected number of members, amount/number of premiums collected and the reduced dependence on external funding. Thanks to new software introduced with PMBA, monitoring of these indicators will be possible.

Sustainability in term is the core concern of both PMBA and its partners Agriterra and MIAN. In the coming fifteen years, the PMBA should be able to attain a sustained growth measured in financial strength and membership base

GOALS

	Partner Sites
	Partner Sites