BanKo targets P7-B micro-loans this year – Manila bulletin

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Slows branch expansion

BPI Direct BanKo (BanKo), the savings bank subsidiary of the Bank of the Philippine Islands (BPI) specializing in financing micro-enterprises for amounts as low as P25,000 up to P150,000 without collateral, aims to provide P7 billion micro-loans this year to help micro-entrepreneurs recover from the impact of the pandemic despite the continued reduction in the planned expansion of its branches nationwide, as the deployment remains difficult due to persistent movement restrictions.

Rod Mabiasen, senior vice president of BPI Direct BanKo, told the Philippine Chamber of Commerce and Industry’s “MSME Lending Solutions Webinar Series” that they aimed to grant $ 7 billion. pesos in loans to micro-enterprises in 2021, which is 1 billion pesos more than the 6 billion pesos they granted to micro-entrepreneurs last year.

Despite the higher lending target, Mabiasen said he would reduce the planned branch opening this year due to difficulties in deploying his marketing teams. He said they could be limited to opening just 5 branches this year and reschedule or suspend the rest. Each branch is occupied by 8 to 10 people depending on the market to which they are aimed.

BanKo has aggressively opened 100 branches per year since its operation in 2016. It now has 305 branches nationwide. In January-February last year, he said, the company carried out an aggressive operation but was interrupted by the March closures, forcing them to halt construction of 100 branches.

But the loan did not stop. In fact, Mabiasen said BanKo was ordered by its BPI head office to resume lending during the pandemic year to help microentrepreneurs, the industry most affected during the pandemic. As a result, BanKo was able to approve micro-finance loans of 6 billion pesos in 2020 alone.

He explained that micro-entrepreneurs were the most affected in 2020 as they operate on a weekly basis. Most of them have had to close for months and have no capital to reopen their small businesses.

To help micro-entrepreneurs, BanKo had to set up a rehabilitation fund for existing clients with existing loans to enable them to obtain additional financing to reopen their businesses. BanKo also offered a loan term extension or restructuring program, a grace period and extended repayment to make it more affordable.

To date, BanKo has over 100,000 active borrowers. According to Mabiasen, there are around 5 million households doing microenterprises which BanKo aims to extend funding to 2.5 million households with a monthly income of P15,000 and above.

Mabiasen explained that BanKo, a formal loan finance for microenterprises, offers easy and quick release for a minimum unsecured loan amount of P25,000-150,000. All a borrower has to do is go to the nearest BanKo branch, scan their QR code for digital filing or contact one of the BanKo Pares and BanKo Mares who go to their public markets to obtain application forms. The applicant only needs to submit four documents: a mayor’s permit or barangay authorization, valid ID, utility bill, and a 2 × 2 photo.

Once the paperwork is completed, a credit investigation officer will be deployed to the address to assess their business income and inventory. The loan is approved within 3 days or 5 days maximum. Once approved, the borrower is issued with a BanKo savings account which they can use to pay off the loan or withdraw the amount owing for their suppliers. BanKo also has over 1,000 treasury agents or payment centers, including Palawan Express and Tambunting Pawnshops, where customers can load or fund their accounts. Besides loan financing, BanKo also offers insurance and savings requirements.

Most of the micro-enterprises they cater for are palengke stand owners, farmers / businessmen who sell their products, service mechanics, hair salons, salons, restaurants, artisans and others. many food companies, from light fixture manufacturers to furniture makers / cabinet makers who don’t just retail. their products but provide entrepreneurs, among others.

For loans over P 150,000, BanKo requires a guarantee in terms of the disposal of assets. These assets include motorcycles, trucks, vans, ovens or any other valuables that are not new, provided they are in working order. Loans can be made by auto-repayment at one of BanKo’s branches, by post-dated checks or by motorized collection.

A loan of 100,000 pesos repayable over 12 months has a monthly repayment of 10,500 pesos and 6,400 pesos per month for 24 months. In the last 4 years of activity, BanKo has been able to build its loan portfolio and has already released 18 billion pesos in loans to its customers. His achievements have been recognized by various institutions.

“Over the past 4 years, as we were building microloans for small businesses, we were able to capture 17% of the total microcredit loans issued by banks,” Mabiasen said.

Mabiasen cited the recognition of the best micro-finance initiative awarded by Asian Banker in 2017 as his greatest achievement, as it was awarded one year after the start of its activities. BanKo was also recognized by Asia Money as the best microfinance bank in 2019.

BanKo is the result of the merger of two units specializing in the savings banks of the Bank of the Philippine Islands: BPI DirectSavings Bank (the first Internet bank in the Philippines) and BPI Globe BanKO (the country’s first mobile savings bank ).


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