Microcredit: creating a thriving socio-ecological rural community in Batangas, Philippines.

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Augustine Doronila.

Gloria Sadje. hodag. flickr cc.

The 2015 encyclical by Pope Francis, Laudato Sí: On care for our common home, is considered a rallying point, not only for Catholics, but also for people from different faith traditions, and for those of goodwill. It has spoken powerfully about how our religious and spiritual consciousness has a vital role to play in ensuring that our planet, ‘our common home’ can be saved from becoming totally uninhabitable for millions of people and for many living creatures.

A theme developed by Pope Francis, along with his predecessors Popes Benedict and John Paul II, is that of human ecology, an interdisciplinary approach to understanding human environmental systems. It seeks to combine understanding of the biophysical realities of human existence (such as dependence on natural resources) with the social and psychological dimensions of human health and wellbeing. Furthermore, the discipline looks to the consequences of human action on our social, natural, and built environments.

In simple terms, human ecology attempts to describe the factors in human communities large or small which enable wellbeing in a humane world. Some of these applications focus instead on addressing problems which cross-disciplinary boundaries or transcend those boundaries altogether. Whether approached via social pathways or environmental ones, eventually the same destination is reached.

Economy of Communion in the Philippines

A recent visit to the Philippines put me face-to-face with the developmental and urbanistic challenges of greater Manila, the fifth most densely populated urban area in the region, with 23 million inhabitants. The metropolis is bursting to its seams, among other things, due to the construction boom giving rise to many multi-story buildings and massive shopping malls, a significant increase of new cars into the already gridlocked and inadequate road network, and of course the continual influx of people from the provinces swelling the numbers of the informal settler and the urban poor.

As I travelled southeast to the province of Batangas, I realised 30 km from the commercial centre of Makati that one already notices the increasing encroachment of the urban sprawl markedly transforming the previous verdant rice and sugarcane-growing landscapes. I could not but ask: what is happening to the rural communities? How is their strong communitarian or bayanihan lifestyle being changed by this push to enter an economy based on consumption and the use of technology? No doubt the social problems involved in such a rapidly changing society are complex, but part and parcel of this is the adverse impact on our natural world.

It was an encounter with the administrators of a rural bank, as well as with their clients, which provided me with a tangible response to the socio-ecological problems faced by a rural community. Francis and Tess Ganzon, a couple based in Ibaan, Batangas, 100 km south east of Manila, have been running the rural bank of Bangko Kabayan since 1977. They put things into context for me, explaining, “the Philippines is predominantly an agricultural country, whereby 70-80 percent of its population are in the rural areas and essentially engaged in agricultural activities. It is the world’s second-largest coconut grower, and provides livelihood to one-third of the country’s population. Most parents face challenges in raising their family with the small incomes they earn.”

In Batangas, businesses range from small- and medium-scale pig and poultry farms to small cottage industries like weaving, vegetable farming, and making traditional delicacies. As such, they are highly vulnerable to market fluctuations, and are considered high credit risks for the banks. In the past, lack of access to formal credit sources made them fall prey to informal lenders charging usurious rates. This created a vicious circle of indebtedness.

The government legislated for the establishment of rural banks in 1954, essentially to address the problem of usury. Rural folks now have access to reasonably-priced credit made possible by cheap funds sourced from the Central Bank.

“In 1991”, Francis Ganzon continued, “when we heard of the Economy of Communion, it refocused our vision, in so far as the business enterprise is concerned. Among other things, it meant part of the profits of the organisation being utilised for the needs of the poor. And not only that, the other part of the profit should be invested in structures that would inculcate, develop and sustain a new culture, the ‘Culture of Giving’ as it’s called, which would be the very foundation of the Economy of Communion. And this we liked very much.”

Pope Benedict XVI’s encyclical letter, Caritas in Veritate, speaks in Paragraph 46 of an ‘Economy of Communion’. It was cited by the Pope as a promising form of intermediate activity between for-profit business and classic non-profit institutions, rupturing what the pope called an “exclusively binary model of market-plus-state” which is “corrosive of society.”

Microcredit at work

Tess described to us how they developed Bangko Kabayan’s microfinance project. It is based on the Grameen Bank’s microcredit initiative conceived in Bangladesh in 1976 by Muhammad Yunus, the 2006 Nobel peace prize laureate. In simple words, it addresses the need for training and working together as a community, thus to a great extent guaranteeing repayment of loans.

We were able to visit one of these community groups for their weekly meetings, during which women are organised into cells and bigger groups called centres. One of the senior credit officers, Agnes, explained how the women are trained in terms of credit discipline, as well as in various forms of livelihood to supplement their income.

Furthermore, Tess explained, “all this involved a lot of time and hard work, because we have to meet with the women, organise them, train our credit officers to give an input in the weekly meetings, and then lend out only what they can pay back, as well as collecting savings”.

“However, we understood that this kind of activity is what really makes a big difference in the lives of a great number of people who would not otherwise have had access to credit, and they’re the ones who are really in need. So we see microfinance as a very potent tool for poverty alleviation. And as a financial institution, we have finally found greater meaning in our mandate.”

We then had the opportunity to ask some of the women about the effect of their involvement in the microfinance program. The meeting was very lively, and the women volunteered their thoughts cheerfully. One lady shared how she was able to have two loan cycles to change from being a seller of vegetable seedlings to becoming a grower, then to acquiring a piece of land to create a plant nursery and a vegetable plot to add value to her small enterprise.

Another woman said that her loan enabled her to obtain the materials to sew curtains for an expat Filipina’s house in California, creating further orders from many other expats. Another woman described how she set up a catering business with her home-cooked meals. One lady invested in a tricycle to deliver farm produce to the market and to other clients.

They all expressed their gratitude for the opportunity to improve the lives of their families by educating their children, and by putting aside money to provide for their emergency needs. One could but not realise that they had an strong sense of self-determination. At the end of the meeting, they were glad to pose for a photo, before the woman with the tricycle departed with four other members. They expressed that sense of connection and a shared journey.

Social capital & community

philippines microfinance meeting
The day spent at Bangko Kabayan to understand the Economy of Communion through the microfinance project demonstrated how social capital is enriched in a community. Creating the conditions for a thriving and resilient rural community removes the pressure on country folk to transfer to the city and enter into the cycle of poverty and dependency. The locals have been more than capable in harnessing and being custodians of the local natural resources.
BK Microfinance centre meeting, March 2016.

The past three popes have, through their writings, certainly made a significant contribution in putting ecological thought at the service of humanity. Like any respectable academic human ecologist, they have coherently connected protection of nature, development, and human dignity. Respect for nature is intimately linked to the need to create relationships between individuals and nations which are attentive to the dignity of the person, and capable of satisfying genuine needs. No doubt they would have approved of this example of the just use of credit.

For further reading: Luigino Bruni (ed) The economy of communion: toward a multi-dimensional economic culture. (New York: New City Press, 2002), and at the Economy of Communion International website: Guidelines to running an Economy of Communion Business.

Gregory J Millman, ‘Serving God: Law at a Philippine Bank, Risk & Compliance’, Wall Street Journal, at


Robert Dyball & Barry Newell, Understanding human ecology: A systems approach to sustainability. (Milton Park: Routledge, 2014) and the Society for Human Ecology.

Dr Augustine Doronila is an environmental scientist at the University of Melbourne Australia. His expertise is in environmental chemistry and ecology, and human ecology. He can be contacted by email at adoro@unimelb.edu.au.


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