DBP to triple MSME loans ahead of 2020
STATE-RUN Development Bank of the Philippines (DBP) is confident it can triple its loans to micro, small and medium enterprises (MSMEs) ahead of its 2020 target, amid its efforts to change its business model.
DBP Executive Vice-President and Chief Development Officer Benel D. Lagua said they may be able to triple their lending activities to small businesses earlier than 2020.
“Originally we said we wanted to triple [ MSME loan growth] in five years but I think with the changes that we’re undergoing, [ with] our new president [ in DBP]... we will be able to do that earlier,” Mr. Lagua told BusinessWorld in an interview.
“What we want[ ed] to do in five years earlier, we plan to do it in three years’ time,” he added.
DBP First Vice-President Daniel M. Gonzales last year said the bank targets to triple its present MSME portfolio by 2020, backed by the lender’s annual 25%-30% growth.
By end-2015, the governmentrun lender recorded a 14% growth in its total MSME loan portfolio to P7.6 billion from the P6.67 billion raked in 2014.
DBP’s MSME retail lending in 2015 reached P5.19 billion, up 27% compared to 2014’s P4.09 billion. MSME lending stood at P2.41 billion.
According to Mr. Lagua, MSME loan growth hit 35% in 2016, surpassing its 30% target.
For 2017, DBP is looking to grow its MSME portfolio by 75%.
Mr. Lagua said DBP is looking at ways to cater to underserved clients around the country.
“Kasi ang model ng DBP ( Because DBP’s model) in the past was for it to be an apex or wholesale bank, but today since we see that the bigger need is to serve the underserved and the unserved clientele all over the country, then we’re really trying to look for alternative ways of reaching out to them,” he said.
He admitted the its branch network, which reached 113 by end- 2016, is “disadvantage” in growing their loan book for small businesses.
However, Mr. Lagua said they are trying to overcome this challenge by partnering with the Department of Trade and Industry via its GoNegosyo centers.
“We want to use partners as conduits in terms of trying to reach out to the clients. So the idea [is like] what we want to do is do more with less, basically that’s the idea,” he said.
In 2015, the government-run bank saw its total loans reach P238.8 billion, higher from the P204.6 billion gained in the previous year.
As of end-2015, DBP recorded a net profit of P4.721 billion, up from the P4.549 billion recorded in 2014.