What a difference a loan can make: micro enterprise development in the Philippines

Student Activities

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1. List some of the difficulties that are faced by many poor families in rural areas of the Philippines. Do you think that rural families in Australia face the same problems?

   Draw up a chart about the different ways that people used their loans to help them increase their income. The following are examples of the types of issues you could think about.

   What type of activity was chosen?

   What equipment or other resources did the activity require?

   What skills did the workers need to run the business?

   Who would be likely to buy the products?

   What did the loan enable the workers to do?

   Think about what other useful questions you could ask.

2. Investigate the small businesses in your neighbourhood. How would you group them into categories? Which kind of business is the most common? Which kind seems to be the most successful? Why do you think that is so? How have local businesses changed since ten years ago?

3. Interview someone who is self-employed or has set up their own small business in Australia. Plan your questions carefully beforehand. (Some suggestions are listed here)

   Where did the idea for your business come from?

   1. How did you get started?
   2. What advice or training did you need?
   3. Did you need to take out a loan? If yes, how easy was it to obtain the loan? If no, did you receive any other kind of financial assistance?
   4. What problems have you faced?
   5. What would be your advice to someone else wanting to start a business?
   6. Do you think it would be harder or easier to start a small business in the Philippines (tell them about the examples) than in Australia? Why?

4. In the Philippines, the project workers and the community had to decide who would receive loans, how much they could borrow, and for what purpose. What kinds of rules do you think they might have agreed on? What problems do you think they would try to avoid?

   One rule was that before being granted a loan, the applicants had to write up a proposal, including how much the activity would cost and how much income it would earn, and how long it would take for them to repay the loan.

   Think of a way you could try to earn money to support yourself while you are studying, if you could not find a job working for someone else. Draw up a statement of estimated costs and income, to find out whether the activity will be profitable.

5. Find out more about community development projects which assist people to earn a living in a country in Asia, Africa or Latin America. You may wish to contact AusAID, or non-government agencies. How would you decide how effective these projects have been? What lessons have been learned about microenterprise projects?