BPI offers specialized bank for small, medium enterprises

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InterAksyon file photo of a BPI branch.

BPI launches specialized microfinance bank for small bizmen

MANILA, PHILIPPINES — The number of micro, small and medium enterprises (MSMEs) in the Philippines continue to rise yet their access to financing remains low.

Thus, the decision of Ayala-led Bank of the Philippine Islands (BPI) in 2016 to merge its specialized thrift banks, BPI Direct Savings Bank Inc. and BPI Globe BanKO, to form the microfinance bank – BPI Direct BanKo, Inc. (BanKo) – to cater to self-employed micro entrepreneurs (SEME).

The microfinance bank currently have 24 branches nationwide, 15 of which were recently opened in Bicol, Pampanga, Davao, and Negros Oriental.

BanKo chairperson Natividad Alejo, during the launch of the microfinance bank Tuesday, said they target to open additional branches and micro banking officers (MBOs) to end the year with 100 branches.

“Potentially (we want) to expand this some more in the next three to five years if the model works,” she said.

MSMEs account for 99.5 percent of registered business establishments in the country but its contribution to domestic growth is only around one-third of the domestic output.

The sector also employs about 61.6 percent of total workforce, 54.7 percent of which are with the micro and small businesses.

Alejo said some 2.5 million Filipino households belong to the SEME segment.

”(They) provide backbone for the Philippine economy but the need to provide focus and access to financial services for this segment is very evident,” she said.

Citing results of a Bangko Sentral ng Pilipinas (BSP) survey in 2015, the BanKo chair said only 31 percent of Filipinos adults have an account with the bank, 25 percent of Filipinos never save, and 52 percent of the credit needs of the retail market is provided by informal service providers.

Through the merged financial entities, Alejo said BanKo would be able to provide small businessmen loans that amounts to at PHP25,000 to PHP100,000.

She said BanKo’s products relies on scale, management of risks and espouses trust and assures the public that their clients are helped by financial advisors who give expert financial advice.