BANGKO PINOY RURAL BANK
MICROFINANCE EXPERIENCE
OUTLINE OF
PRESENTATION
 Bank Profile
 Previous Microfinance Experience
 Present Microfinance Experience
 Features of BPRB Microfinance
Product
 Performance of Microfinance Product
BANK PROFILE
 Established in 1974 to serve the financial
needs of the rural folks of Philippines and
the neighboring areas in Southeast Asia
 Has ___ branches/ units established as
follows:
Philippines - 1974
Malaysia - 1989
Singapore - 1994
Thailand - 1997
Vietnam - 1998
Indonesia - 1998
BANK PROFILE
Financial Condition:
 Assets:
 Deposits:
 Loan Portfolio:
Regular
Microfinance
 No. of Depositors:
 No of Borrowers:
Regular
Microfinance
 Net Income
BANK’S PRODUCTS


Deposits
• Savings
• Time
• Current
Loans
• Agricultural
• Commercial
• Industrial
• Other Loans
- Salary Loans
- Microfinance Loans
BANK’S PRODUCTS
 Other Services
•
•
•
Petnet/Western Union
Uniteller
Payment Center – Water District
BANGKO PINOY’S PREVIOUS
MICROFINANCE” EXPERIENCE
 Past “microfinance” products:
• Market Vendors’ Loans
• Microfinance Group Lending
MARKET VENDORS’ LOAN
 Description
 Loan Features
 Lending Procedure
 Performance
MICROFINANCE GROUP LOAN
 Description
 Loan Features
 Lending Procedure
 Performance
PROBLEMS ENCOUNTERED
 No product manual or guidelines
 Missed Payments/Failure to pay the
loan after maturity
 High Past Due Ratio
 Lack of monitoring/lack of peer
pressure
BANGKO PINOY’S
EXPERIENCE
AS A PARTICIPANT BANK OF THE
RBAP/MABS PROGRAM
Factors that Convinced the Bank to
Resume its Microfinance Activity
 A systematic approach/technology to doing




microfinance has been made available
Market-driven loan product
Close monitoring with the installation of MIS
Deposit build up mitigate risk
Frequent collection = high effective income
ADJUSTMENTS MADE IN DOING THE
MICROFINANCE OPERATIONS –MABS
WAY
 Human Resources – new organizational structure
 Marketing – used flyers, posters and streamers
 “Our clients became our marketing arm.”
 Financial – allocated funds for microfinance loans
and other fixed assets investments like computer
hardware and software, motorcycles, filing
cabinets, others
Previous Organizational Chart
Internal
Auditor
Board of Directors
President
Vice President
Unit Managers
Cashier
Teller
Solicitor
Bookkeepers
Asst.Bookkeeper
SA/CA - Clerk
Loan Officer
Loan Clerk
New Organizational Chart
Internal
Auditor/Comp.
Officer
Board of Directors
President
Asst. to the Pres.
Vice President
Area Managers
Unit Managers
Cashier
Bookkeepers
Loan Officer
Teller
Asst.Bookkeeper
Loan Clerk
Solicitor
SA/CA - Clerk
Microfinance
Officer
Account Officer
BPRB’s INDIVIDUAL MICROFINANCE
PRODUCT
KAPUSO LOAN
TARGET CLIENTS
KAPUSO LOAN
 Intended for microentrepreneurs
 Loan sizes of P5,000.00 up to P30,000.00 for
first time borrowers
 2.5% monthly interest amortized equally
 3% service fee deducted up front
 Loan term : 60 days up to 180 days
 Mode of payment : weekly, semi-monthly &
monthly
 Walk in or Pick up service for loan payments &
deposit
KAPUSO LOAN
 Loan Security :
– 1 co-maker only
– Security Agreement
– Above P50,000.00 - REM or Chattel Mortgage
or Deed of Assignment of Deposit
 Deposit Build up:
– Initial deposit of P100 only
– Regular deposits to go with each loan payment
SIGNIFICANT THINGS LEARNED
FROM THE MABS APPROACH
 Thorough character and credit checking
 Thorough cash flow evaluation
 Very conservative determination of debt
capacity
 Simplified & fast processing of loan
releases
 Zero tolerance to delinquency
SIGNIFICANT THINGS LEARNED
FROM THE MABS APPROACH
 Market study prior to product design
 Product designed according to market
needs
 Loan administration procedures
documented in the Product Manual
 All borrowers are required to
attend Client Orientation
KAPUSO Loan Performance
As of January 2004
No. of Branches
-6
No. of Borrowers
- 959
Loan Portfolio Balance - 8.286M
PAR more than 7 days - 2.68%
PAR more than 30 days - 4.91%
KAPUSO Loan Performance
As of January 2004
Cum. Amt. Of loans disbursed – P35.854M
Number of AOs
- 20
Average # of loans/AO
- 48
Average loan portfolio/AO
– 414k
Loan Portfolio (Pesos)
9,000,000.00
8.3
8,000,000.00
7.1
7,000,000.00
6.2
6,000,000.00
5,000,000.00
4.8
4.10
4.5
4,000,000.00
3.7
3.6
3.5
Jun
Jul
3,000,000.00
2.5
1.9
2,000,000.00
1.6
1,000,000.00
1.1
0.00
Jan
Feb
Mar
April May
Aug Sept Oct
Nov Dec
Jan
Active Borrowers
1200
1000
959
822
800
692
589
600
529
400
361
410
444 458
257
209
200
94
147
Au
g
Se
pt
Oc
t
No
v
De
c
Ja
n
Ju
l
Ju
n
ay
M
ril
Ap
ar
M
Fe
b
Ja
n
0
Portfolio At Risk (%)
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
l
Au
g
Se
pt
O
ct
No
v
De
c
Ja
n
Ju
Fe
b
M
ar
Ap
r
M
ay
Ju
n
Ja
n
0.00%
Thank you!!!