Third-World Groups Help Poor Help Themselves

THE streets are barely 6 feet wide; open sewers carry garbage and effluent to a nearby fetid canal. But surprisingly, many homes in this district in Metro Manila have metal roofs, electricity, and running water.

The working poor live here, struggling to survive. Organizers from Tulay sa Pag-unlad Inc., or Bridge to Progress, have chosen this area to help the poor help themselves. Bridge to Progress extends loans, sometimes as small as $50, to assist residents to set up small businesses.

Angelina Pelajio owns a food stall, which consists of two narrow wooden benches under a thatched roof. Serving chicken adobo (stew) to noontime customers, she says many of the poor residents are willing to work hard, given an opportunity. Ms. Pelajio and her family wake up at 3 a.m., she says. They buy food at the market, cook it at home, and then begin serving breakfast and lunch at the stall. Their day ends at midnight.

Pelajio was not able to get a conventional bank loan because the amount she needed was so small. She also had no formal credit history or collateral. She took out a $100 loan from Bridge to Progress and pays back a few dollars each week out of her daily profits of $4-$5.

Poverty fighters

Benjamin Montemayor, executive director of Bridge to Progress, calls such women ``natural poverty fighters.'' Faced with unemployment, women want to ``preserve whatever is left for their children,'' Mr. Montemayor says. Women also have a much higher loan repayment rate than men, he says.

Bridge to Progress is one of a growing number of self-help programs in third-world countries sponsored by Opportunity International, an Illinois-based, non-denominational Christian organization. Bridge to Progress understandably draws strong support from conservative businessmen but, surprisingly, also gets kudos from left-wing activists.

In 1982, Opportunity International contacted Montemayor, then a banker, about setting up a program in the Philippines. He says he decided to drop out of the high-pressure business world and use his skills to fight poverty.

Today, Opportunity International works with eight Filipino groups in various parts of the island chain. In 1992, these groups loaned out $3.1 million and helped create 8,256 jobs, according to Opportunity International statistics.

Bridge to Progress will only make loans to groups of five to six people, each of whom guarantees the others' payments. All must attend seminars that teach them about fiscal responsibility, cleanliness, and maintaining a Christian spirit.

Loan officers, acting like community organizers, visit the small businesses to collect weekly loan payments. The program strives for self-sufficiency by charging enough interest to cover costs.

``The poor don't need charity,'' Montemayor says. ``They are paying market rates'' for the loans, sometimes as high as 40 percent annually.

Political support

Joel Rocamora, a consultant to antipoverty organizations in Manila, says many political leftists support such self-help programs because the government and international agencies have ignored the working poor.

``The World Bank and similar agencies don't care about these people,'' Mr. Rocamora says. ``They're too busy with massive projects that benefit foreign corporations.''

But Rocamora does criticize the high interest rates sometimes charged by Bridge to Progress. ``I think 40 percent is taking it a little bit far,'' he says, pointing out that the government offers subsidized loans for as little as 6 percent.

Montemayor rejects any government subsidies, however, saying the poor must be self-reliant. Generations of poor people have paid local loan sharks as much as 20 percent interest a week, he says. By comparison, Bridge to Progress' rates are competitive.

Pelajio says the loan not only helps her business, but has given her confidence in the future. ``I want my business to become bigger,'' she says, so her only son can graduate from high school. Eventually, she says, ``I want my son to be an attorney.''