MFI Information:

Negros Women for Tomorrow Foundation (NWTF) II
Mission: NWTF’s mission is to provide sustainable financial and client-responsive developmental services to the poor

Decent Work Area:

Vulnerability, risk management and overindebtedness

Innovation:

Financial Services: Individual Emergency Fund (emergency savings)

Introduction of the Individual Emergency Fund (IEF). The IEF is an emergency savings account that can be augmented by voluntary contributions as well as a 10% interest rate rebate automatically credited upon punctual loan repayment. The savings balance can be used for meeting emergency expenses thus preventing additional debt or bringing about a consumption smoothing effect.

Results:

Strongest results:
positive impact on over-indebtedness/multiple borrowing,

• Cross-borrowing decreased in multiple indicators: 22% reduction in taking out loan to repay another, 7% reduction in borrowing from formal and 1.5% from informal sources
• Repayment difficulties decreased by 7%
• Improvement of precaution-related financial attitudes

Inconclusive results:

• Financial behaviour/risk management
• Vulnerability: while study shows significant increase in ability to cover all household expenses (4.2%), it also finds a decrease in the ability to cover unforeseen household expenses

Negative result:

• Clients took less insurance, e.g. decrease of >30% in life insurance (negative impact on asset building))

Relevant links:

• 1 Page poster with summary of MF4DW intervention and MFI profile
• NWTF Philippines: Microfinance and risk management: An impact assessment of an Individual Emergency Fund