Microenterprise Access to Banking Services

ERNESTO and TESSIE SUNICO : Tenacity in Tacurong

This is a story of tenacity and perseverance. It is also a story of obtaining access to financial services at a crucial time.

In 1997, Mr. and Mrs. Ernesto Sunico decided to start a small business. They rented a small stall in the public market of Tacurong, a city in the province of Sultan Kudarat, Mindanao.  With only 1200-pesos ($24) starting capital, they started selling fruit, charcoal and beans.  They earned daily profits of about 200 pesos ($4). With this limited income, the Sunico couple was barely able to provide for themselves and their one child.

Then El Niño struck in 1998. The prolonged dry period adversely affected predominantly agricultural Sultan Kudarat. The couple’s daily sales plummeted and they were in danger of losing their modest business and their only source of income.

To augment what was left of their funds, they borrowed money from five-sixers, informal lenders who charge interest rates of about 20% per month. Unfortunately, instead of pulling the couple out of trouble, these loans led them to become more indebted. Not only did they have to contend with keeping their business together; they also had to repay a high-interest-loan.

It was around this time that the Rural Bank of Tacurong (RBT) started giving microenterprise loans. With technical assistance from the Microenterprise Access to Banking Services (MABS) Program, the RBT designed loans for microentrepreneurs, a sector that, until then, had no access to loans from the banking sector.

The Sunicos availed of a 25,000-peso ($500) loan and used the money to purchase additional inventory. This time, Mr. Sunico sold beans and other items door-to-door while his wife continued to tend to their stall in the market. Both businesses prospered and grew.

After their 5^th loan, they had earned enough to add a milling and grating service to their enterprise. They now grind farm produce – corn, rice, and coffee – and also grate coconuts. They continue to sell all types of beans and rice both at wholesale and retail levels.

Thanks to reasonably priced loans from the Rural Bank of Tacurong, their business continues to grow.  They now plan on sending their child to college and also plan to buy a 10-hectare plot where they will plant fruit-bearing trees.