BPI Globe Savings Bank raises P250M for expansion

MANILA, Philippines - BPI Globe Savings Bank (BanKO) has raised P250 million in fresh capital for its expansion program for 2011.

BanKO is a thrift bank that focuses on lending to microentrepreneurs, using mobile banking technology as its principal distribution platform instead of physical branches. It is a joint venture among sister companies Bank of the Philippine Islands (BPI) and Globe Telecom, and parent firm Ayala Corp.

BPI president and chief executive officer Aurelio Luis R. Montinola III said of the total amount raised, P100 million was sourced from BPI, another P100 million from Globe and P50 million from Ayala Corp.

“We will use it for branch expansion and microlending,” Montinola said on the sidelines of the annual convention of the Chamber of Thrift Banks (CTB). BanKO, the world’s first technology-based formal bank for micro-lending, plans to establish a maximum branch network of 20, based on a three-year plan.

BanKO branches serve as regional centers for both financial activities and mobile banking technology. Part of the three-year plan is to have at least one branch for every major region.

“The branches will, of course, engage in microlending and receive micro-deposits. It is a work in progress,” said.

The amount raised was lent to microfinance institutions (MFIs) as wholesale loans, which in turn were re-lent to microentrepreneurs. MFIs are entities dealing in microfinance such as non-government organizations (NGOs), cooperatives, and rural banks

Another tool for the “branchless” thrift bank is the 15,000 sub-distributors of Globe nationwide. The BSP last Friday accredited the sub-distributors as remitting agents, which in effect transformed the distributors as cash-in, cash-out centers for receiving deposits and loan payments, and extending loans or remittances.

It is already operating five branches located in Naga, Lucena, Dumaguete, Tacloban, Dipolog, on top of the main office in Metro Manila.

Last November, BanKO raised over P30 million in the form of pledges from companies allied with the Ayala Group of Companies. The pledges would earn 4.5 percent in the form of a systemic savings with a holding period of six-months. Pledges that fall under the classification of special savings deposits would earn three percent, compared with standard savings interest rates of slightly over one percent.

BanKO was also able to receive a grant from the Bill & Melinda Gates Foundation, which will be used for systems and technology research.

BanKO was established in late 2009 with an authorized capital of P500 million and a loan portfolio of P1 billion. It is the country’s first thrift bank that will mainly rely on mobile technology to do banking chores.