An evaluation of the SEEDS (Social Entrepreneurship and Enterprise Development

Services) project of Unlad Kabayan Migrant Services Foundation on job creation

In partial fulfilment of the requirements in IR 201

Narvadez, Karla Krisanta D.

Prof. Jorge V. Sibal

Introduction

On the 2012 survey on Overseas Filipino Workers, the number of Overseas Filipino Workers

(OFWs) who worked abroad at any time during the period April to September 2012 was

estimated at 2.2 million. The Overseas Contract Workers (OCWs) or those with existing work

contract abroad comprised 95.0 percent (2.1 million) of the total OFWs during the period April

to September 2012. The Asian Development Bank explained the rise in migration that the

inordinate focus on the services sector, instead of reviving its industrial sector and creating

much-needed local jobs and value adding production (Unlad Kabayan Migrant Services

Foundation 2011 Annual Report). It is in this backdrop that further explains the tremendous rise

expansion of the overseas labor market. Because of the failure of the local economy to produce

jobs, workers have flooded out of the country seeking better jobs and pay. In 2012, (period of

April to September) the total remittance by OFWs was recorded at an estimate of 165.6 billion

pesos. These situations have paved the way to a remittance driven, consumption led economy,

the OFWs, and their families have disposable income that is spent for appliances, education, and

consumption goods (Ofreneo, 2013). While the bulk of the remittances are used and continued to

be used for consumption, the initiative for the effective utilization of these remittances for

savings, business investment and community development is acknowledged by different sectors

for long-term economic growth (Proceedings from the International Conference on OFW

Savings, Remittance & Economic Potential, 2003 p. 17).

One of the initiatives is the establishment of social enterprises, by definition, social

entrepreneurship is the process of pursuing suitable solutions to social problems. This is what

Unlad Kabayan Migrant Services Foundation Inc. has been doing for our OFWs since 1996. It

started as a reintegration strategy by migrant groups from Hongkong through savings. Their goal

was to “reverse the outflow of Filipino migrants overseas by building job opportunities at home”.

The organization was established in the Philippines in 1996 to pioneer the Migrant Savings for

Alternative Investment (MSAI), savings groups from Japan, Hongkong and other destination

countries were mobilized to provide capital for micro-finance operations and micro enterprise

building in the country (Unlad Kabayan local website). One of the strategies used to make this

happen is the Social Entrepreneurship and Enterprise Development Services (SEEDS). It was

designed as a community-based training and resource center to promote entrepreneurship in

communities, and assist them in building, managing and sustaining their enterprises.

The researcher is a firm believer that if you teach a man how to fish, you feed him for a lifetime.

It is with this belief that the researcher was inspired to pursue this research. As social

entrepreneurship does not only provide opportunities to our countrymen through livelihood

programs, trainings and assistance, but most importantly, it builds social character, by giving

decent work, self-worth and raise social morale.

The Statement of the Problem

This study aims to evaluate and analyze the effectiveness of the Social Entrepreneurship

and Enterprise Development Services (SEEDS) project of Unlad Kabayan Migrant Services

Foundation on job creation.

It specifically investigated the answers to the following questions:

1. Where does the operational funds come from?

2. What is the selection process for the beneficiaries?

3. How effective is this project in terms of job creation and maintenance for the

recipients?

4. What are the standards used to measure the effectiveness of the project?

5. What are the factors that contribute to SEEDS’ effectiveness?

6. What are the problems encountered?

Significance of the Study

The purpose of this study is to evaluate the effectiveness of the SEEDS project in terms

of job creation for the migrant workers that Unlad Kabayan Migrant Services Foundation serves.

This study was conducted at the Unlad Kabayan Migrant Services Foundation, a non-

government organization that aims to reverse the outflow of Filipino migrants by creating jobs

here in the Philippines by providing capital for expanding savings mobilization, investments and

social enterprises. This paper will be beneficial:

To Unlad Kabayan Migrant Services Foundation, this paper will serve as a reference for

their SEEDS strategy. It will also help create further improvements for project and retain the best

practices.

To social enterprise organizations that is still in the process of building their strategy and

operations.

To fellow students, this paper will serve as a reference for future studies on social

enterprises/ social entrepreneurship.

Scope and Limitation of the Study

The purpose of this paper is to evaluate the employment creation through the SEEDS

project of Unlad Kabayan Migrant Services Foundation Inc. This is the social enterprise project

of the organization to equip the migrant workers it serves through training, enterprise assistance

and incubation in Lanao and Davao. This paper discusses the initiatives, tools, fund sources,

standards to measure the success of the project in terms of job creation and sustainability.

Data gathered through the reports (coverage is 2009 to 2011), which was generously

provided by the organization, and a personal interview of the organization’s Executive Director,

Ma. Angela “May-an” dlC Villalba and an Unlad staff which is a former beneficiary, Ms. Perla

Almaden. However, a survey to the beneficiaries of the organization was not possible due to

proximity and time constraints, as the communities are located at Mindanao (Lanao and Davao).

The study took place in Unlad Kabayan headquarters in UCCP Building EDSA Quezon

City, from October 1 to 15, 2013.

Definition of Terms

1. SEEDS – Social Entrepreneurship and Enterprise Services

2. MSAI – Migrant Savings for Alternative Investment

3. NGO- Non government organization

4. Migrant Workers – refers to a person who is engaged in a remunerated activity in a

State of which he or she is not a national. (United Nations definition)

5. Social Entrepreneurship- is the process of pursuing suitable solutions to social

problems.

6. Social Enterprise – is an organization that applies commercial strategies to maximize

improvements in human and environmental well-being, rather than maximizing profits

for external shareholders.

7. Grants – are non-repayable funds disbursed by one party (grant makers), often a

government department, corporation, foundation or trust to a recipient, often, (but not

always) a nonprofit entity, educational institution, business or an individual.

8. Ethnic Enteprises- offer products both to an expatriate and an interested mainstream clientele (mainly restaurants, stores for food or clothing etc.).

Review of Related Literature and Studies

A paper presented at the Dialogue on Mediterranean Transit Migration (MTM)

Interactive Map on Migration (I-MAP) on June 12-13, 2013, discussed the possibility of

entrepreneurship in contributing to the economic development of migrants. Factors affecting the

migrants’ decision in favor of entrepreneurship are personal & cultural factors, and regulatory &

business environment, which can also determine the type of enterprise. Personal & cultural

factors include the social networks of the migrants for this is crucial to entrepreneurship;

propensity to take risks and gender in which women has more restrictions than men do. External

environment include: access to information on investment and entrepreneurship, access to capital

and credit were identified as a limiting factor, often, migrant entrepreneurs are more likely to

revert to capital in the form of savings and family support. It was also identified in the study that

migrants are more strongly affected by the lack of alternative employment, in which

entrepreneurship can be a strategy for overcoming unemployment (MTM I-Map Expert Meeting,

2013, p. 1-3).

In a study by Zenou & Wahba (2012), they highlighted the importance of social capital

(networks), access to credit and human capital in entrepreneurship. In their findings, return

migrants are more likely to become entrepreneurs, even if they lose their social networks may be

temporarily interrupted, the accumulated savings and experience overseas, compensate for that.

Their findings was that policies for easier access to credit must be prioritized and Helping

returnees to utilize their new learned skills and use productively their overseas savings is

important in order to maximize the benefits of migration. Also, providing access to information

about investment to return migrants is essential to counter balance their weaker social capital

upon return (Zenou et al, 2012).

In the Philippines, the call to create jobs, and strengthening micro-finance programs,

trainings and re-skilling to equip our return migrants to start their own small business by

allowing the return OFWs access to credit, to serve as start up funds for small enterprises and

livelihood programs, from rural banks, cooperatives and NGOs is encouraged. Setting up more

small and medium enterprises, will help create more jobs, and provide stable income not just for

the returning OFWs but for non-migrants as well.

The factors identified in these literature, were also the same factors emerged from the

interview conducted in this research: Human and social capital, access to credit, and information

on investment, were critical factors to establish a successful social enterprise.

Conceptual Framework

Social Enterprise (SEEDS): Strengthening Social Capital, Enchancing capacities, Harnessing natural &physical assets, Diversifying livelihood, accessing funds and techonology, build synergy

Jobs/Employment Creation Financial Returns

Factors for Effectiveness:-Champions serve as models (social

entrepreneurs) Social Capital-Government support through

interest free loans to access machineries, trainings (DTI & DOST)

-Use of business tools to train communities

-Provides social character-Family support

Problems/Challenges Encountered -Funding flexibility

-Follow through on entrepreneurial skills-Access to capital

-Power Supply (frequent outage)-Weather

-Workers ethic and behaviors

Methodology

Research Design

The method of research used in this paper is Descriptive-Evaluation research as it seeks

to gauge the effectiveness of the Social Entrepreneurship and Enterprise Services (SEEDS)

project of Unlad Kabayan Migrant Services, Inc. Data gathered to answer the research questions

by interviewing of two experts one participant is an Executive Director and the other is a current

staff (and beneficiary) of the organization. The secondary data collected are documents, and

company reports on evaluation of livelihood and jobs generated through this project from 2009

to 2011.

Research Procedure

Gathering information on social entrepreneurship (globally and locally) was the first step

in this research. After validating that there are organizations with this initiative, the researcher

scouted for non-profit organizations within Quezon City that has a strong social entrepreneurship

orientation. Unlad Kabayan Migrant Services Inc. was selected in terms of proximity,

availability of persons for interview, documents and other resource materials. The researcher

used structured questions for the one-on-one interview. The questions were sent to the executive

director a day prior to the interview for reference.

Interview Questions:

1. What is the operational model/strategy used for this project?

2. How is the operational model/strategy initiated and rolled out?

3. Who are the recipients of the project?

4. How effective is this project in terms of job creation and livelihood for the

beneficiaries?

5. What are the Key Result Areas used to measure the effectiveness of the project?

6. What are the factors that contribute to SEEDS’ effectiveness?

7. What are the problems encountered?

8. What are your hopes for the next years of this project?

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1. How did the SEEDS project helped you?

2. How did the project affected the overall quality of your life?

3. Were the trainings contributed greatly to the success of your business?

4. Did the project added a sense of security to you and your family?

5. Are you confident that the SEEDS project will continue to empower your community?

Analysis of Data

The primary data gathered in this research is from interviewing the executive director of

Unlad Kabayan Migrant Services Inc., Ms. Ma. Angela dlC Villalba and a former beneficiary

(now staff), Mrs. Perla Almaden.

The researcher identified two major parts based from the answers gathered from the

interview: financial and social aspects in measuring the effectiveness of the project in terms of

job and livelihood creation.

Financial

According to Executive Director Villalba, the organization’s funds come from approved

grants proposals they send every year to different international organizations such as Ford

Foundation, Christian Aid, World Council of Churches, and Global Fund for women. She

expressed their difficulty in raising funds, and how it affects in carrying out of projects. Funding

from grants is used to start new programs, pay for the staff’s salary, office rent and operations.

“We are like a rubber band. If we get big funds, we carry out big projects and hire people, project

based. But if the funds are low, we make use of it, to carry out small initiatives.” A service fee is

paid by the beneficiaries once their enterprises becomes sustainable. It is usually a 10% or 5%

(depends on the proximity of the area) of the initial capital. One enterprise, the BBHK school

supplies in Sanchez Mira was given an initial capital of Php 230,000 after five years of hard

work, the enterprise became sustainable, and gave back Php 23,000 as service fee. The service

fee, covers the other logistical expense of the organization such as, travel, business plan

assistance, monitoring, community scanning and supplier linkage.

The organization measures the success of a project in terms of financial returns

generated, in which the actual income is larger than the capital.

Based on the data gathered from the financial performance report 2009-2011, the trend of

the returns (net income) from the period is decreasing. The respondent mentioned in the

interview, that most of the time, enterprises are merely operational and needs additional loan to

be sustained.

Several factors contribute to this such as:

lack of entrepreneurial skills follow through, trainings take more than a year, and

beneficiaries have different learning curves.

Workers’ ethics and behaviors –many of the workers have a dole out mentality in

which the organization, in partnership with the DTI and DOST needs to break

through trainings

Access to capital –the apprehension to go to the bank

Frequent power outage which disrupts production and operations

Weather – many of these enterprises are dependent on the natural resources found

in their area. If a disaster strikes, many enterprises ‘ products are destroyed and

they need to start the process of production all over again.

As shown in the conceptual framework of this paper, the job and livelihood are generated

through the financial returns from the social enterprises. The table below shows the jobs and

livelihood generated from 2009 to 2011 decreased. This is understandable because of the

typhoons encountered from 2010 (Typhoon Ketsana) and 2011 (Typhoon Sendong).

2009 2010 20110

100

200

300

400

500

600

700

800

Jobs & Livelihood Generated from 2009 to 2011

JobsLivelihood

Social

In the interview with former beneficiary, Mrs. Perla Almaden, she said that the SEEDS

project has opened opportunities for her and her product, crispy peanuts in Iligan. Unlad

Kabayan, after seeing the potential of her product gave her a minimal loan of Php 20,000. After

the entrepreneurial skills training she had undergo, she launched Femfem Delicious Crispy

Peanuts which sold Php.1.00 a pack. Later on, these peanuts were shelved in big stores and malls

in Iligan and Cagayan de Oro City. To improve the packaging of her products, she sought help

from the DTI and DOST Lanao del Norte which also facilitated her product exposure in Trade

Fairs and in Tourism fairs. And soon she was selling Femfem peanuts in Cebu and Davao.

This opportunity enabled her to send her three children to college. She said that the

SEEDS project has helped create livelihood not only for her but for others and improved the

overall quality of their lives. She attributes the success of her enterprise to the assistance, and

trainings that equipped her with the skills to expand her business.

One of the standards that Unlad Kabayan use to measure the success of SEEDS is the

Social Return of Investment:

Jobs are created

Workers learn production efficiency

Empowerment of people/community

Lifts up the level of decent living

In the interview with the executive director, she said that it makes it easier for the migrants to

decide to come home because they know that there is a job/livelihood available. The social value

of being able to come home to their families compensate for the overseas income loss. She gave

BBHK school supplies as the best example, in the period of five years, six OFWs was able to

come home, and a year later, one of them, started another business apart from BBHK.

Based on the testimony of Mrs. Perla Almaden, and the number of jobs/livelihood created in

2009 to 2011, the project has been successful in terms of Social Return of Investment.

Conclusion

The SEEDS project, from the period of 2009 to 2011 was successful in generating jobs

and livelihood to its beneficiary communities that provided decent living to the people. This

initiative has a great potential to generate more jobs and livelihood, if given more resources. The

use of business tools to equip the people with basic entrepreneurial skills is an effective way to

empower the beneficiaries.

However, the project, to be able to sustain its programs, needs to secure alternative

funding sources, aside from grants so it can carry out programs in larger scale. Partnership with

corporations, through Corporate Social Responsibility can be a possible channel to tap, for

support.

The decrease in jobs/livelihood over the course of the data gathered, can be attributed to

environmental disasters which heavily affect the production and the dispersion of funds to aid

Ketsana and Sendong affected families.

Due to limited literature on the subject of migrant and entrepreneurship, further studies is

recommended.

References

1. Unlad Kabayan Migrant Services Foundation Inc. 2011, “Crispy as a Peanut”, Fruits of

our Labor p.32-34.

2. Unlad Kabayan Migrant Services Foundation Inc. 2011 Annual Report,

http://www.unladkabayan.org/annual-report-2011.pdf viewed 7 October 2013

3. Unlad Kabayan Migrant Services Foundation Inc. 2010 Annual Report,

http://www.unladkabayan.org/annual-report-2010.pdf, viewed 7 October 2013

4. Unlad Kabayan Migrant Services Foundation Inc. 2009 Annual Report,

http://www.unladkabayan.org/annual-report-2009.pdf, viewed 7 October 2013

5. Wahba, J & Zenou, Y, 2009. “Out of Sight, Out of Mind: Migration, Entrepreneurship

and Social Capital, IZA DP no. 4541, http://ftp.iza.org/dp4541.pdf viewed 10 October

2013

6. MTM I-map Expert Meeting,2013 “Migrant Entrepreneurship” http://www.imap-

migration.org/fileadmin/Editor/Meeting_Doc/Marseille_Meeting_M_D/MTM_i-

Map_Marseille_meeting_Background_Paper_EN.pdf viewed 14 October 2013

7. Reyes, E.2013, OFWs must be able to find a place in the growing economy-Cayetano,

http://www.interaksyon.com/business/63723/ofws-must-be-able-to-find-place-in-

growing-philippine-economy---cayetano viewed 14 October 2013

8. Ofreneo, R.2013, “Precarious Philippines: Expanding Informal Sector, Flexibilizing labor

market”, American Behavioral Scientist,p.434.

9. Oliveros, M.D.,2003,Proceedings of the International Conference on OFW Savings,

Remittance & Economic Potential, A challenge to governance, partnership and

development, p.17

10. Total Number of OFWs is Estimated at 2.2 Million (Results from the 2012 Survey on

Overseas Filipinos),2013, http://www.census.gov.ph/content/total-number-ofws-

estimated-22-million-results-2012-survey-overseas-filipinos viewed 14 October 2013