DBP expanding retail business in bid to reach out to unbanked
THE Development Bank of the Philippines (DBP) will expand its retail banking business as the lender intends to introduce more unbanked Filipinos to the financial system.
DBP President and Chief Executive Officer Cecilia C. Borromeo said the state-owned bank will focus on small depositors living in rural areas as they try to lure more people into the formal banking system.
“We’re looking at one million new depositors in the next five years translated to six new depositors per branch per day,” Ms. Borromeo was quoted as saying in a statement sent to reporters on Friday.
In an earlier with BusinessWorld, Ms. Borromeo said 70 million of the country’s population still do not have any access to formal banking products and services. “As a development financial institution, if we could get one million new depositors, who have never had any experience dealing with a bank, that would be a feat.”
She noted that the lender’s aggressive plan to reach the unbanked, as well as an expected growth in corporate and government deposits, will help the bank’s retail sector to expand and make up 30% of the bank’s business from the current 25%.
“I think the retail segment would be at 25% and we want to grow that. I would be very happy to reach 30%,” Ms. Borromeo said, adding that the share of its retail segment is not as significant compared with the other banks due to its limited number of branches.
For this year, the lender is eyeing to open six more branches to penetrate underbanked areas, which will be added to its current roster of 125 branches.
“In 2018, we will not be as aggressive as like having 15 to 20 more branches in 2018, but we have identified areas where we should establish a branch,” Ms. Borromeo said, adding that DBP opened 12 new branches last year.
“[I]t’s a good mix of commercially viable areas and underserved towns to support the national agenda of financial inclusivity. We take that to heart — we’re willing to invest in areas where other banks are shy to invest [in].”
Aside from opening new branches, Ms. Borromeo said DBP will enhance its Internet and mobile banking systems and harness agent banking.
Agent banking entails a network of individuals equipped with technology to perform basic banking services such as opening accounts, applying for a loan and checking for balance, among others. The agents will be deployed to areas where banks are absent.
Meanwhile, Ms. Borromeo added that DBP will establish new lending centers in 22 provinces, which will cater solely to small and medium enterprises. “The heads of the lending centers will have [the power] to approve at a certain level the loans so that the processing time will be reduced,” she said. •