1. BANGKO PINOY RURAL BANK
MICROFINANCE EXPERIENCE

2. OUTLINE OF PRESENTATION
Bank Profile
Previous Microfinance Experience
Present Microfinance Experience
Features of BPRB Microfinance Product
Performance of Microfinance Product

3. 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 Thailand
Malaysia Vietnam
Singapore Indonesia

4. BANK PROFILE Financial Condition: Assets: Deposits: Loan Portfolio:
Regular
Microfinance
No. of Depositors:
No of Borrowers:
Net Income

5. BANK’S PRODUCTS Deposits Savings Time Current Loans Agricultural
Commercial
Industrial
Other Loans
- Salary Loans
- Microfinance Loans

6. BANK’S PRODUCTS Other Services Petnet/Western Union Uniteller
Payment Center – Water District

7. BANGKO PINOY’S PREVIOUS MICROFINANCE” EXPERIENCE
Past “microfinance” products:
Market Vendors’ Loans
Microfinance Group Lending

8. MARKET VENDORS’ LOAN Description Loan Features Lending Procedure
Performance

9. MICROFINANCE GROUP LOAN
Description
Loan Features
Lending Procedure
Performance

10. 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

11. BANGKO PINOY’S EXPERIENCE
AS A PARTICIPANT BANK OF THE RBAP/MABS PROGRAM

12. 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

13. 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

14. Previous Organizational Chart
Board of Directors
Internal
Auditor
President
Vice President
Unit Managers
Loan Officer
Cashier
Bookkeepers
Loan Clerk
Asst.Bookkeeper
Teller
SA/CA - Clerk
Solicitor

15. New Organizational Chart
Board of Directors
Internal Auditor/Comp. Officer
President
Asst. to the Pres.
Vice President
Area Managers
Unit Managers
Cashier
Bookkeepers
Loan Officer
Microfinance
Officer
Asst.Bookkeeper
Teller
Loan Clerk
Account Officer
Solicitor
SA/CA - Clerk

16. BPRB’s INDIVIDUAL MICROFINANCE PRODUCT
KAPUSO LOAN

17. TARGET CLIENTS

18. KAPUSO LOAN Intended for microentrepreneurs
Loan sizes of P5, up to P30, 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

19. KAPUSO LOAN Loan Security : Deposit Build up: 1 co-maker only
Security Agreement
Above P50, 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

20. 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

21. 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

22. KAPUSO Loan Performance As of January 2004
No. of Branches
No. of Borrowers
Loan Portfolio Balance M
PAR more than 7 days %
PAR more than 30 days %

23. KAPUSO Loan Performance As of January 2004
Cum. Amt. Of loans disbursed – P35.854M
Number of AOs
Average # of loans/AO
Average loan portfolio/AO – 414k

27. Thank you!!!