BPI Direct BanKo (BanKO), the microfinance subsidiary of the Bank of the Philippine Islands (BPI), said there is still a huge unmet demand for microfinance loans in Baguio and La Trinidad owing to tourism and dense population in the area.
BanKO President Jerome Minglana said this presents a huge opportunity for BanKO to spread financial inclusion to more Filipinos, particularly self-employed microentrepreneurs (SEMEs), through its loan products.
In Baguio, there is one BanKO branch serving a community within a 10-kilometer radius, a limitation set by the bank in order to build close relationships with clients through its BanKOMares and BanKOPares and serve them effectively.
“We actually need more BanKOMares and BanKOPares, or loan assistants, to accommodate potential clients from 129 barangays in the city. Our BanKOMares and BanKOPares are our conduits to clients who not only need loans for their businesses but also financial and business advice which our loan assistants can provide,” he said.
The branch expansion in the area will likely happen next year since the 100-branch target for 2019 has been alloted for previously identified places. By the end of the year, BanKO will have 300 branches nationwide, and will continue to add 100 branches a year in the next two years.
“We’re looking at Cogias, Apayao, Tabuk, and Luna. We’ve now collected data on the number of businesses, population, and average revenues of places we identify. We just need to match it with other proposals elsewhere in the country,” said Minglana.
BanKOMares and BanKOPares come from the communities served by BanKO branches.
They build relationships within the community and the vendors and small business owners who can benefit from BanKO’s loan products.
Mr. Minglana said branch expansion will also help the bank to reach out to more SEMEs not only in the city but in nearby municipalities.
“We have a very active market in Baguio which is densely populated. In fact we even have our night market. Most of our clients are engaged in retail selling of fruits and vegetables, second-hand clothing, brand new clothing or RTW, shoes, and apparel, cellphones and accessories, souvenir shops, fish and meat vendors,” he said.
These vendors now have the chance to avail of loans in as short as two to five days. There are no onerous requirements, just a barangay permit and a visit by the BanKOMare or BanKOPare in the place of business. Loans range from P25,000 to P300,000.
“We really want to help these entrepreneurs and give them an alternative to the informal lenders who charge them 5-6. We placed so much science in this segment of the market and we believe we are succeeding in helping these enterprising Filipinos,” he said.
By the end of the year, BanKO hopes to help 91,000 small and medium entrepreneurs with P7 billion in loans.