BPI’s microfinance unit sees loan portfolio doubling to P4B
BPI Direct BanKo Inc., the microfinance subsidiary of Bank of the Philippine Islands (BPI), is seeking to double its loan portfolio to P4 billion this year with the opening of 100 branches.
During the opening of its the company’s 200th branch in Los Banos, BanKo chair Simon Paterno said they were aggressively expanding to compete head on with informal lenders.
BanKo offers collateral free loans with minimal documentary requirements that are limited to just a government ID and a mayor’s permit or barangay permit.
Simon Paterno, chairman of Banko, expects to help more micro-entrepreneurs looking cheaper financing.
He said the processing of loan applications and release of funds are fast.
Banko offers micro financing of between P25,000 and P300,000 with interest rates ranging from 2 to 2.3%, lower than the 20 percent interest charged by informal lenders or more commonly known as five-six.
The term of the loan is six months to three years.
BanKo officials say its difficult to estimate how big the informal lending business is but lending by cooperatives and NGOs amount to around P30 billion.
“We are here to fulfil a need,” said BanKo president Jerome Minglan (Eileen Mencias)