BPI Globe Savings Bank eyes P1-billion microfinance portfolio

MANILA, Philippines - BPI Globe Savings Bank (BanKO), the country’s first “branchless” thrift bank is looking to build up its microfinance loan portfolio to P1 billion in its first year of operation.

The new mobile savings bank of the Ayala Group of Companies said it is targeting to acquire 500,000 accounts in its first year and one million accounts by the third year.

BanKO, a joint venture among the Bank of the Philippines Islands (BPI), Globe Telecom and their parent firm Ayala Corp. formed in October 2009, said it hopes to hit its target through wholesale lending to microfinance institutions (MFIs), non-government organizations (NGOs), cooperatives, rural and thrift banks.

BanKO will rely on mobile banking technology to tap MFIs for microlending as well as accept savings deposits.

With an authorized capital of P500 million, BanKO can extend a single wholesale loan to an MFI worth P80 million or a single retail loan of P150,000.

Interest rate for loans to wholesale borrowers was pegged at three percent per month.

“We have to make the bank profitable to be able to fulfill our social mission of bring credit to the unbanked and underbanked,” said Teresita B. Tan, president of BanKO and executive vice president of BPI.

She said while it is dubbed as a “branchless” bank, BanKO intends to open five regional branches with the approval of the Bangko Sentral ng Pilipinas (BSP). The five branches would serve as regional centers and will concentrate on wholesale lending rather than retail.

Since it will be using the GCash platform of G-Xchange Inc. (GXI), a subsidiary of Globe, BanKO said it does not need to open more branches but will rely on field coordinators to open avenues with the MFIs.

Adding to the “branchless” nature of the bank is the 18,000 sub-distributors of Globe nationwide. The BSP last Friday accredited the sub-distributors as remitting agents, which in effect transformed the distributors as cash-in, cash-out centers for receiving deposits and loan payments, and extending loans or remittances.

That will make BanKO the domestic bank with the largest branch network nationwide. In fact, it will have more branches than the entire Philippine banking system of 7,878.

Twenty-one MFIs are already doing business with BanKO, having come from the microfinance desk of BPI. Total credit transactions amounted to nearly P1 billion covering 190,000 individual and wholesale accounts.

BanKO will also extend insurance coverage to both the depositor and the borrower. The insurance policy will be issued by BPI Philamlife Assurance Co., the joint venture company of BPI and the Philippine American Life and General Insurance Co. (Philamlife).