BPI Direct BanKo taps IFC to strengthen and further digitalize microfinance operations

 

BPI Direct BanKo President Jerome Minglana signed a Memorandum of Agreement with the International Finance Corporation, represented by Qamar Saleem, IFC’s Manager for Advisory Services, Asia and Pacific, to identify additional opportunities to help self-employed micro-entrepreneurs and to implement new products and services in order to bolster the recovery from the pandemic, which has significantly affected micro-businesses.

BPI Direct BanKo, the microfinance arm of the Bank of the Philippine Islands (BPI), has signed a memorandum of agreement with the International Finance Corporation (IFC) to identify opportunities to improve and expand the products and services it offers to self-employed micro-entrepreneurs (SEMEs). IFC will support BPI Direct BanKo in the development of additional loan products, the digitalization of existing processes and services, and the development of additional credit scorecards.

BPI Direct BanKo President Jerome Minglana said the agreement would help advance the bank’s digitalization and further promote financial inclusion in the Philippines.

“We trust that the technical expertise and global experience of IFC will help BPI Direct BanKo develop and implement relevant products and services that will benefit Filipino SEMEs in the short term and in the long run,” he said.

Micro-businesses are a huge contributor to the local economy, accounting for 89 percent of companies and 30 percent of jobs. However, they have been disproportionately impacted by COVID-19 due to factors such as the lack of financing options and a heavy reliance on domestic demand.  

“The challenges in gaining access to credit for micro-entrepreneurs and in granting credit for lenders like BanKo have been further exacerbated by the pandemic,” added Mr. Minglana. “BanKo, instead of being discouraged by the developments, is even more motivated to provide financial products and services to the unbanked and underbanked by innovating and by partnering with IFC, which is also a staunch supporter of micro-entrepreneurs and women in business.”

Under the plans, SEMEs will be able to gain easier access to a range of products and services, with the added benefit of new digitalized processes that will be introduced. This will be part of a new loan growth strategy for BPI Direct BanKo that will not be highly dependent on the expansion of brick and mortar offices.

“With more than half of the Philippine’s micro, small and medium-sized enterprises (MSMEs) led by women, the pandemic has emphasized the need to foster greater financial inclusion, particularly for those impacted businesses owned and led by women,” said Jean-Marc Arbogast, IFC’s Country Manager for the Philippines.

“We look forward to supporting BanKo’s efforts to grow its rural footprint and customer base through capacity building in risk management and digital lending, which will help improve access to finance for Filipinos and promote a more inclusive recovery from COVID-19,” said Qamar Saleem, IFC’s Manager for Advisory Services, Asia and Pacific.   

Mr. Minglana said BPI Direct BanKo is expecting not only to expand its products and services and make these easily accessible to SEMEs, but also to develop an improved credit scoring model by combining BanKo’s expertise with IFC’s global knowledge and experience. This strengthened model will allow BPI Direct BanKo to make informed, strategic decisions relating to lending risk.

“These innovations and partnerships are expected to foster growth among Filipino SEMEs, reflecting our commitment to supporting the recovery of the MSME market from the pandemic and consequently the nation as a whole,” Mr. Minglana added.

The project is being supported by the governments of Australia and Japan, as well as the Women Entrepreneurs Finance Initiative (We-Fi).

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About BanKo

BPI Direct BanKo, Inc., A Savings Bank (or “BanKo”) is the microfinance arm of the Bank of the Philippine Islands (BPI). BanKo’s thrust is to promote financial inclusion by providing access to easy, convenient and affordable microfinance products, focusing on Self-Employed MicroEntrepreneurs (SEME). By strengthening the financial capacities of its clients, BanKo aims to create a positive impact on their quality of life, and ultimately, contribute to the country’s economic growth.

About IFC

IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.