BPI Globe BanKO: New Hope for Unbankable Entrepreneurs in their First Time Business Loan – The launching of BPI Globe BanKO ushers new dawn of hope for small entrepreneurs especially those applying for first time business loan. BPI Globe BanKO is a mobile savings bank with microfinance as its main thrust.
Ayala Corporation subsidiaries Bank of the Philippines Islands (BPI) and Globe Telecom have teamed up to put up a mobile savings bank with plans to lend out P1 billion in microfinancing over the next two years. They we’re putting up a new venture BPI Globe BanKO, which is a synergy of the three companies, harnessing Ayala’s thrust for sustainable development, BPI’s expertise in financial services, and Globe Telecom’s strength in mobile technology.
The BPI Globe BanKO will focus on supporting microfinance institutions with funding and capacity-building programs as well as reaching the untapped market. This venture sprouted with the institutions’ desire to reach the “unbanked” and “underbanked” segment of the market that are limited in having financial access precisely due to their location and rural condition.
According to BPI Globe BanKO president Teresita B. Tan, the firm will have an authorized capital of P500 million of which P350 million is paid up. The new mobile savings bank can lend up to 75 percent of their paid up capital plus money from bank deposits.
The bank will primarily focus on wholesale lending to Microfinance Institutions as well as providing capacity-building, knowledge-sharing and training support. BPI Globe BanKO will also reach out to the currently un-served markets and offer financial inclusion (savings and lending) through mobile banking, specifically with the use of Globe’s G-Cash Technology.
Back in 1989, BPI was the first commercial bank to grant loans to microfinance institutions (MFIs) for funding through the BPI Foundation. In 2006, the BPI Microfinance Unit was formally incorporated into the bank’s business.
BPI Globe BanKO will absorb and expand the wholesale microfinance portfolio of BPI. With BPI Globe BanKO, the three companies aim to reach out to the untapped microfinance market in the country by providing microfinance institutions (MFIs) much needed funding and development programs.
“The gap between demand and supply for microfinance funding is immense. Based on the figures released by Asian Development Bank for 2007, only eight percent of the demand was met. BPI Globe BanKO will work hand-in-hand with MFIs to service the entrepreneurial poor even at the base of the economic pyramid,” Tan said.
“Our strategy is to provide innovative products and services, establish a market-oriented ecosystem, and utilize of alternative low-cost channels of delivery,” adds Tan.
The new BPI Globe BanKO features strong service for wholesale microfinance, providing MFIs with four major services: wholesale microfinance loans, capacity-building loans, electronic banking, and partnerships with international guarantors.
In addition, BPI Globe BanKO has also set up its own academy for training purposes. The BanKO also has an existing partnership with Ateneo de Manila University’s Institute of Social Sciences. Through the partnership, trainers are brought to MFIs located in various areas of the Philippines, conducting courses on various areas ranging from governance and portfolio management to product development and MIS.
BPI Globe BanKO provides a cost-effective lending model and system that can handle microfinance needs in large volumes. The bank benefits from the strength of BPI’s systems and Globe’s experience in micro transactions.
Mercy Corps as funded by the Bill Gates Foundation, also supports BPI Globe BanKO that is set to open its main office at Greenhills in February 23, 2010. Mercy Corps provided BanKO with initial research capability, expertise, and training.
I am excited to see the full operation of BPI Globe BanKO, for this will give more benefits to small entrepreneurs who are now opening a small business to apply for their first time business loan with low interest rates and no hard collateral. The good thing of BPI Globe BanKO is that it will encourage small businessmen to save money through deposit accounts that will also earn interest.