Microfinance II: On the Ground in the Philippines

In 2007, Clint Wilson, a San Francisco-based entrepreneur, spent time in the Philippines exploring Internet cafes and the region 60 miles north of Manila. He studied the area, the markets, the population, the risks and challenges and decided to embark on his idea.

His idea was to launch an Internet cafe and use that as the basis for his microcredit business model. Soon he and his wife Cristy, a native of the Philippines, launched CnC Partners, a microfinance business with operations in the Philippines and in San Francisco. His wife's family would assist in the getting the business off the ground in Bamban, a small, under-developed city north of Manila.



Wilson presented his business model Feb-4 in Part II of a microfinance webinar series sponsored by the Consortium Finance Network. (Part I in January focused on the history and basics of microfinance.)

During the session, he explained how he cultivated the idea with help and inspiration from his wife and her family in the Philippines and how he painstakingly researched the marketplace and the potential customer base. He had many goals:

(a) to be competitive and profitable in offering Internet services via a newly built cafe in Bamban,

(b) to reinvest profits directly back into the business to grow it and permit him to expand into microcredit activities,

(c) to provide employment for locals, and

(d) to help the regions where CnC operates in social and economic ways.



A staff of 10, including members of his wife's family, operates the new Bamban (Luzon) cafe. But this wasn't supposed to be just another cafe offering access to computers or just another one of the many such businesses that fail in the Philippines. Clint wanted to be unique, creative in ways to spur traffic and to give people an exciting, rewarding and interesting reason to go to the cafe.

He would charge for time on the Internet at the cafe (about 20 pesos/hr), but CnC would offer an array of other services, products, and enticements--games, English lessons, courses for adults, prizes and other products (even access to rental apartments, on its property).

Clint highlighted how kids today come to the cafe, hang out, establish Facebook accounts and learn by diving into Cyberspace. CnC provides an environment conducive for learning, he boasted. The fee is not necessarily prohibitive, because CnC offers discounts, permits bartering, and has a points system for access for high-volume users.

Clint said this is part of a long-time dream, which started in the 1990's, he said, "when he was on a 60-mile bike trip in China" and explored the countryside and economic development. This led to a graduate-school thesis on a similar topic and ultimately led years later to the formation of CnC--whose objectives are both financial and social.

In the presentation, he used a photograph of an improverished neighborhood alley in Bamban and told how it has inspired him to use his business to do his part to develop the area and to improve the fortunes of the inhabitants in the area.

With the Bamban cafe, CnC intends to reinvest profits to (a) build other smaller cafes with similar attractions and (b) build a viable, broad-based microcredit organization. Hence, one business will create profits and capital to be used to invest in and build the microlending organization.

CnC is growing the microcredit side in various ways. It is involved in a "rice project" in the southern Philippines, where it makes large loans (50,000 pesos) to farmers, who lend to other farmers and build a lending hierarchy based on business trust and relationships. Profits from this endeavor would, yes, be reinvested to support expansion of the Internet-cafe business.

CnC will also explore (and exploit) other existing microfinance models--e.g, Kiva, Riskebiz, etc., all ways to funnel microloans from those who want to support to those who have specific 30-day needs.

CnC is also growing the microcredit side in another way--via Facebook. It has built a Facebook page, "CnC Cafe' Microcredit Alley" with over 1,500 fans. "Fans" (or clients, borrowers, participants, and/or sponsors) can meet via the page and apply for loans or help facilitate lending. And similarly to the cafe', CnC will offer attractions to boost business--discounts, airline tickets, etc.

Some participants in the webinar were interested in opportunities in microfinance in the long term, but also for this summer. Or more specifically, "Are there opportunities for MBA's to work as interns for CnC?"

Clint was encouraging, because an organization like CnC can use MBA talent and energy. CnC will hire interns this summer and hopes to have at least one intern from the U.S. thereafter every three months. His firm offers not only on-the-ground business and financial experience, but a cultural experience with social action.

CFN will post Clint's presentation for more people to review. If you have specific questions or comments about his experiences, his business model, and opportunities, reach out to him via http://www.linkedin.com,/ through the CFN group in Linkedin, or by contacting Rachel Delcau (delcaur@cgsm.org) at the Consortium.

Tracy Williams