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PROJECT 0218

Center for Community Transformation

Microfinance for the entrepreneurial poor— Philippines —

“For I know the plans I have for you,” declares the LORD, “plans to prosper you and not to harm you, plans to give you hope and a future.”

Jeremiah 29:11

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CENTER FOR COMMUNITY TRANSFORMATION PROJECT 0218

He who pursues righteousness and love finds life, prosperity and honor.Proverbs 21:21

Project Synopsis

DescriptionCreate new branches of the ecumenical ministry, Center for Community Transformation (CCT). One branch will help up to 1,000 poor, but ambitious, families build profitable businesses, diminish their oppressive poverty and fund community social programs.

Cost$68,750 — the cost to fund a new branch for its first year.

LocationImpoverished neighborhoods throughout the Philippines

SummaryTwenty-six percent of

Filipinos live below the poverty line. Though able and ambitious enough to start their own businesses and lift themselves out of poverty, many simply don’t have any capital to start making money. Banks will not loan them the tiny amount needed to launch their small enterprise. But they can get the boost they need from the Center for Community Transformation.

CCT gives aspiring entrepreneurs microloans, training, and support, through their participation in accountability groups called “fellowships.” These groups study the Bible and pray together, and encourage each other to make timely loan and savings installments. Over time, many such fellowships are spun-off throughout an economically-depressed area. Once the count of active borrowers reaches 1,000, a branch is officially established.

Together the entrepreneurs of a CCT branch generate financial returns on their savings and loans at a rate competitive in the financial industry. With the proceeds of this collective income, they invest in their community through social programs for needy children and families.

One branch can be firmly established in about two years and can generate enough income to sustain its community outreach programs in about four years. As a branch grows beyond its 1,000-partner capacity, a new branch is begun, more people are able to lift their families out of poverty, and the ripple of community transformation widens.

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The Problem: It takes money to make moneyIt doesn’t take much — as little as $70 — to start a small, home-based enterprise that could turn

around a poor Filipino family’s economic condition. But it might as well be $7 million to a struggling family living hand-to-mouth. They would need to borrow the little bit of money it would take to start a thriving business; and because of their low income, poor families can only afford very small payments on very small loans.

But commercial banks don’t deal in small amounts. That’s because it takes just as much effort to manage a small loan as a large one, yet small loans do not generate enough interest income to warrant the effort. In fact, banks lose money such loans. Furthermore, poor families don’t usually have assets that can be secured as collateral. So banks would have no recourse should they default on the loan, making them too great of a lending risk.

With these odds stacked against them, the only option available to the poor is to borrow from money lenders, or “loan sharks,” at ridiculously high interest rates. Payments on such loans can be unrealistically high during the early start-up stage of a budding small enterprise, dooming it from the start. Entrepreneurs can end up in crushing debt that increases their economic hardship.

Instead, many ambitious Filipinos squelch their dream to start an income-generating business and resign to live hand-to-mouth, stuck in oppressive poverty.

• Nearly 12 million Filipinos live on less than $1 a day.

• 26% of the population lives below the poverty line.

• More than 17 million Filipinos are undernourished.

• The huge income gap between rich and poor continues to widen.

PhilippinePoverty

Too poor to start an income-generating business, millions of hardworking, ambitious Filipinos are resigned to a life of continued poverty.


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The Solution: Microfinance with a Christian twistVery small microloans combined with a program of savings and insurance can help poor families

develop greater financial security. Though the concept has been around since the 1970s, the ecumenical Center for Community Transformation has perfected it with a Christian emphasis, yielding impressive results — and helping thousands of Filipino families in the process.

For more than 15 years CCT has focused on helping individuals and communities from the most vulnerable, yet most hopeful, sector of Philippine society — the entrepreneurial poor. Over the years, CCT has established over 140 “branches,” with each branch representing up to 1,000 borrowing “partners” who are trained and encouraged to be agents of transformation.

Each CCT branch is made up of accountability groups, referred to as “fellowships,” composed of about 20 neighboring partners and led by a CCT staff member. At compulsory weekly meetings, fellowships study the Bible, pray together and make their loan, savings and insurance installments. They become a close-knit support group that encourage each other to meet business goals; support each other in exercising financial discipline; and build each other up in the Christian faith.

Many people grow stronger in their faith through these fellowship meetings. For example, Melinda, a mother of five, used her microloan to start a video rental business out of her home to augment her husband’s meager income. During her weekly fellowship prayer time Melinda asked God for her husband’s job to provide a better income for their family. “I learned about prayer from CCT,” she said. Shortly after she began praying, Melinda’s husband got promoted.

“It’s at the CCT fellowship that I learned about

the Bible.”

Eileen, sari-sari (mini-grocery) store owner

and mother of six

In fellowship meetings, entrepreneurs encourage one another and hold each other accountable to meet business goals.

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Founded on faithMixing business and faith is CCT’s key to success — to

the puzzlement of organizations who offered funding under the condition CCT leave religion out. CCT wisely declined these offers. They discovered early that their impressive results (full repayment of microloans, with interest) is only realized when faith is an inherent part of the program.

“CCT had less than a 50 percent repayment rate before we added the Christian aspect to the program,” says Pastor Sam, an area leader. “Then the repayment rate spiked to 98 percent!”

Ruth Callanta, CCT founder and president, explains the phenomena. “In areas where a majority of members are practicing Christians, those communities have less corrupt business practices.”

“We have not wavered in our purpose, which is to use microfinance as a

tool for bringing the poor to God through his Son, Jesus Christ.”

Ruth Callanta, CCT President

Prayer and Bible study is inherent to every fellowship meeting. Christian principles make individual businesses fruitful, and together their CCT branch becomes prosperous.

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Starting a CCT branchCCT has developed the following fine-tuned methodology for starting a new branch in a poor

community, with proven results:

1. Hold information meetings with potential partners in the target area.

2. Organize a four-week seminar with 10 to 30 participants who receive training and begin weekly saving. During this time the staff reviews the feasibility of small businesses for which loans are being requested.

3. Hold the first fellowship meeting and release the first loans. Loans are given for three or six months at 3 percent interest per month. These first loans are about $70 each and (members and participants) take out larger loans over time. Also, enroll these partners in life insurance.

4. Continue weekly meetings, continue savings, continue and increase microloans for partners.

5. Split and create new fellowships as each fellowship grows to 20, up to a maximum of 1,000 active partners.

6. Create additional social programs for the community, including children’s programs, homebuilding programs, health insurance, low-cost medications, counseling and training programs and community leadership development, once the microfinance program is successfully established and is yielding a financial return.

CCT’s method is unique in that once established, a branch will fund social programs for needy children and families.

Proceeds yielded by a branch’s collective savings and loans fund homebuilding programs and other community projects.


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Transformation timelineFrom the time the first fellowship is established to the time its community begins to transform,

a new branch can be expected to follow this general timeline:

Year 1-2: Launch a microfinance program involving 1,000 active partners by the end of the second year in order to provide financial security for poor families.

Year 2-3: With income realized from interest on loans to partners, create a program for orphaned, abandoned and indigent children in the community. Also begin to offer enrollment in the national health insurance program for all families at a minimal cost.

Year 3: With income realized from interest on loans, begin to provide evangelism and discipleship training and other community programs.

Year 4 & beyond: All programs become self-supporting. Interest income continues to address the social needs of the community.

“As the gap between rich and poor widens, governments are recognizing that giving poor communities a greater say in development initiatives

promotes social equity.”

Asian Development Bank

The first program a CCT branch funds helps orphaned, abandoned and indigent children in their community.


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When life gives you peanuts...Twenty-six percent of Filipinos live below the poverty line, deprived by the country’s lopsided

distribution of wealth. With the boost they’ve been given by their microloan, however, CCT partners are defying statistics.

Marilu, for example, raises two small children at home while her husband works hard as an auto mechanic. Their tiny home is humble: rugged cement walls, worn plywood floor and a rusty tin roof. Thanks to CCT, Marilu makes and sells homemade peanut butter — and it’s making a big difference in their quality of life. With her microloan, Marilu purchased the initial inventory of jars and a bulk quantity of sugar. With each weekly batch of peanut butter sold, Marilu triples her money. She was quickly able to pay back the loan, and now she can afford to send her children to school.

Marilu’s CCT branch boasts a fantastic repayment rate in the financial industry: 100 percent!

Marilu’s peanut butter business has significantly increased her family’s income. Now they can afford the fees required to send their children to school.

Blessed are all who fear the LORD, who walk in his ways. You will eat the fruit of

your labor; blessings and prosperity will

be yours.

Psalm 128: 1-2


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2700 N. Military Trail, Suite 240 • PO Box 273908 • Boca Raton, Florida 33427-3908 • 1-800-914-2420

© 2013 Cross Catholic Outreach. Cost effectively written, designed and printed in-house.

Our Promise to You!100 percent of the proceeds of this appeal will be used for this project. In the event that we receive more than

needed to fund this project, additional gifts will be used for other urgent needs in the ministry.

[Ucm1301]


Courage to persevereHowever, success has come with

struggles. When Odita started her reflexology service, it took time to build a customer base — and a regular income. She didn’t know how she was going to make it. “God provided my loan payment, and I was thankful for that,” she says. With God’s provision and her fellowship partners’ encouragement, Odita persevered. Now she enjoys a regular clientele and much-needed income to help make a better life for her four children.

CCT staff members have faced struggles as well, especially in the volatile Muslim-dominated Mindanao region. Despite the risks, the ecumenical Christian microcredit program has been increasingly successful there. Unfortunately, in 2007 three CCT staff members in that region were killed by radical Muslims. The tragedy caused a divine shakedown at CCT. According to Ruth, “Those who didn’t take the ministry seriously bailed out. For those who did — it firmed their resolve to the ministry.” To exercise this resolve, the entire staff recently began a mandatory project: Together they read the Bible cover-to-cover over two years, complete with exams. “If we’re going to share the Bible, we should know the Bible,” Ruth said.

Empower the poorCCT has earned the respect and support of corporations,

non-governmental organizations and charities throughout the Philippines and beyond. They have been recognized for their outstanding financial performance as well as their sustainable community development. Their concept to empower the poor to help thousands coincides with our mission. This is the kind of ministry we wholeheartedly support — support CCT relies on.

Cross Catholic is committed to helping CCT establish new branches throughout the Philippines. Please consider giving a gift that would help thousands of families lift themselves out of poverty and transform their communities in the process.

“Once the heart is transformed nothing

is impossible!”

Ruth Callanta, CCT President

President and founder of CCT Ruth Callanta visiting with microloan program participants.

project 0218 center for community · pdf fileproject 0218 center for community transformation...

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