BanKo: From exclusion to inclusion
Despite the rapidly evolving banking system in the country, there is still a huge funding gap for the requirements of selfemployed micro entrepreneurs (SEME) that the industry needs to address. These micro businesses are still unable to access credit from financial institutions due to the size of their businesses. This led Bank of the Philippine Islands (BPI) to officially establish its microfinance arm — BPI Direct BanKo, Inc. (BanKo). BanKo serves as BPI’s vehicle for financial inclusion through the delivery of financial solutions to SEMEs. BanKo seeks to provide SEMEs access to easy, convenient and affordable loan products to fund the operations or grow their businesses. BanKo President Jerome Minglana emphasized, “By strengthening the financial capacities of the sector, BanKo aims to create a positive impact in their quality of life, and ultimately, contribute to the country’s economic growth.
BANKO BUSINESS EXPANSION
In less than two years, BanKo was able to open 145 branches, with a loan portfolio of P1.6 billion and more than 35,000 clients served. BanKo believes that expanding its branch network is one of the effective ways to reach more SEMEs in the country. “We hope to end the year with close to 200 branches located in various parts of the country, allowing us to reach and serve more businessmen,” said Minglana. BanKo’s primary product is called BanKo NegosyoKo Loan. It provides the clients a loan that ranges from P25,000 to P300,000 which can be used for additional capital or for business expansion. NegosyoKo Loan offers affordable tiered interest rates and flexible payment options with payment terms ranging from six months to three years. To assist our small businessmen gain access to BanKo’s services, BanKo employs financial advisers called BanKomares and BanKopares. They provide guidance and financial advice, particularly on how SEMEs can manage their business, generate more income, monitor their expenses better, and re-invest their additional income.
SUCCESS STORIES: MICROENTREPRENEURS
BanKo’s financial services and solutions have brought significant changes to the lives of determined and hardworking SEMEs, including Rodel Bustarga, Jhonnel Dimalanta and Jona Bebelone. Mr. Bustarga, a client of BanKo Pili, is an owner of a bamboo craft business in Camarines Sur who supplies nipa huts to resorts. Because of limited resources, he was only able to fund the requirements of two resorts every month. He was able to secure a BanKo NegosyoKo Loan and the proceeds allowed him to supply the needs of five resorts. He was also able to set up two additional shops that are now being managed by his children. Meanwhile, Mr. Dimalanta, a client of BanKo Baliwag, Bulacan, is a bag maker from Bustos, Bulacan. He produces made-to-order bags for giveaways, but due to lack of funds to buy raw materials, he had to limit the number of orders. Mr. Dimalanta was got an additional capital from BanKo Negosyoko Loan that enabled him to buy more raw materials and contract more people in his shop. This allowed him to serve more clients with bigger quantity requirements, and expand his product line. Finally, Ms. Bebelone’s story is another testament of how BanKo uplifts the lives of SEMEs. Ms. Bebelone, a client of BanKo Cagayan de Oro, is a teller of a local pawnshop who decided to engage in an ice cream business under the trade name of “Frosty Delight Ice Cream.” In a short span of time, she was able to put up stalls in different prime locations. She then realized the need for more stocks and upgrade their machine to increase production. With the help of BanKo, she was able to have additional capital, and better serve her customers with new ice cream flavors.
AFFIRMATION OF THE MISSION
Due to BanKo’s unmatched efforts toward promoting financial inclusion, it received the prestigious “Microfinance Initiative of the Year” recognition during the 2017 Philippines Country Awards organized by The Asian Banker. This award was given to acknowledge BanKo for developing a new credit-model that is suitable for SEMEs considering their peculiar circumstances and given their limitations that make it difficult for them to secure loans from formal financial institutions. Asian Banker is the leading provider of strategic intelligence for the financial services industry. –
“We hope to end the year with close to 200 branches located in various parts of the country, allowing us to reach and serve more businessmen.”