BanKo: Empowering lives, sustaining growth and leading financial inclusion

Source: Inquirer

In the transformative year of 2023, BPI Direct BanKo Inc., A Savings Bank (BanKo)— the microfinance arm of the Bank of the Philippine Islands (BPI)— has achieved remarkable milestones, firmly establishing its commitment to sustainable growth and financial inclusion.

Successfully reaching the Self-Employed Micro-Entrepreneurs (SEME), BanKo has emerged as a catalyst for economic development, creating sustainable employment opportunities and leaving a lasting impact on the lives of individuals and communities.

Impact on micro-entreprenuer clients

In 2023, BanKo participated in a study on financial inclusion in Southeast Asia titled: ‘Financial Inclusion in Post-Covid Southeast Asia: Accelerating Impact beyond Access.’

This study was conducted by the Centre for Impact Investing and Practices (CIIP) in collaboration with the United Nations Capital Development Fund (UNCDF) and Helicap, and was supported by 60 Decibels. It aimed to highlight best practices that enable better financial health outcomes in the region.

Results of the study showed that BanKo contributed significantly to the improved lives of its clients across the six dimensions of financial inclusion: access, business impact, household impact, client protection, resilience, and agency. Benchmarked against the performance of more than 100 other microfinance institutions worldwide, BanKo ranks in the top 20 percent in terms of its household impact on education and quality meals.

Innovative financial products

BanKo’s commitment to meeting the evolving needs of its customers is evident in the introduction of innovative financial products.

Launched in June 2023 was InstaCashKo Line (ICL), a short-term Microfinance credit line tailored for self-employed micro-entrepreneurs (SEMEs) requiring bridge financing. ICL significantly surpassed its maiden-year targets by 136 percent, showing the effectiveness of BanKo’s financial solutions in addressing the immediate and seasonal demands of SEME businesses.

And for fast-growing SEMEs that require higher loan amounts, BanKo introduced Max500 Loan, a regular term loan designed to support the expanding business operations of SEMEs. Max500 exceeded its 2023 projections by an impressive 235 percent, underlining BanKo’s pivotal role in fueling the growth aspirations of its clients.

BanKo Mobile App: Bridging the gap

The BanKo Mobile App, a beacon of financial inclusion, has witnessed a surge in registered users and transactions, reinforcing its commitment to “bridgitalization” or bridging the gap of the underserved Filipinos through hyper-local, tech-enabled financial solutions. A 99 percent surge of new registered users in 2023 resulted to a 244 percent increase in financial transactions within the app.

Using BanKo Mobile App, offering a TODO Savings account with a competitive 5 percent interest rate, clients can seamlessly open accounts, including PondoKo Savings, a basic deposit account, and TODO Savings. The repricing of TODO Savings interest rate to 5 percent per annum and the waiver of Cash-In fees at accredited BanKo Cash Agents further underline BanKo’s commitment to financial resilience and accessibility.

The BanKo Mobile App also provides free InstaPay services, load rebates, and minimum fees for bill transactions, enhancing the financial experience for BanKo clients and ensuring that the benefits of digital financial services are accessible to all.

e’Nay: A new digital marketplace

In a strategic partnership with Innovaris, BanKo has revolutionized the landscape with the introduction of the e’Nay app. Launched in June 2023, this digital marketplace links sari-sari stores directly to a major distributor client of BPI.

Facilitating direct ordering and same-day delivery, e’Nay enhances the logistics of inventory replenishment, contributing significantly to financial inclusion. With 6.4k active users in just a few months from the launch date, e’Nay stands as a testament to BanKo’s commitment to innovative solutions and community empowerment.

Unified commitment to financial inclusion

BanKo’s unwavering dedication to innovative microfinance solutions is deeply ingrained in its operational ethos, shaping a future where financial empowerment meets social responsibility.

According to Rodolfo Mabiasen, Jr., the newly-appointed President of BanKo, “The suite of innovative financial products and service enhancements introduced in 2023 reflects BanKo’s steadfast commitment to meeting the evolving needs of its clients.”

He emphasizes that this commitment goes beyond mere service provision, envisioning a financial landscape that is not only resilient but also inclusive, positively impacting the economic and social well-being of the communities BanKo serves.

Mabiasen has been championing financial inclusion as head of the microfinance business after leading the BPI team that launched the innovative NegosyoKo microfinance loan in 2016. Since then, BanKo’s market share of microfinance loans among banks has grown from 2 percent in 2016 to 26 percent.

In 2023, the microfinance loan portfolio of the bank grew by 43percent compared to the previous year, further solidifying BanKo’s position in the microfinance landscape among banks.

BanKo’s total loan portfolio grew by 75percent in 2023, while its deposits level more than doubled. This comes amidst its aggressive expansion mode by growing its network of new branches and branch-lite units (BLU) in the last seven years, growing from six branches in 2016 to 348 by the end of 2023.

“We believe the opening of these new branches would usher in new and more opportunities to advance financial inclusion and deliver on our promise of better banking experience for the masang Pilipino,” said outgoing BanKo President Jerome Minglana.

Minglana served as BanKo President since 2016 and saw the bank’s ranking in terms of asset size rise from 13th position in 2016 to 7th in 2023.

Minglana was recently appointed as president of Legazpi Savings Bank (LSB), a wholly-owned subsidiary of Robinsons Bank Corp, which merged with BPI effective Jan 1, 2024.

This commitment to financial inclusion is echoed by BanKo Chairman Jojo Ocampo, who says, “Through strategic partnerships, digital advancements, and innovative financial products, BanKo stands as a beacon of progress in the Philippine banking landscape, empowering lives and sustaining growth for a brighter future. This forms part of BPI’s vision to help build a better Philippines—one family, one community at a time.”

Ocampo underscores the transformative power of collaboration and technological innovation in driving not just individual success but also societal advancement.

BanKo’s journey in 2023 is more than a narrative of success; it is a resounding testament to its commitment to sustainable growth, financial inclusion, and community transformation.

This commitment not only contributes to the economic uplift of the country but also sets a standard for responsible and forward-thinking banking practices in the ever-evolving landscape.