BPI merge microfinance units

INQUIRER file photo

Ayala-led Bank of the Philippine Islands (BPI) is merging two of its specialized thrift bank units to create what it envisioned to be a formidable lender catering to underserved microentrepreneurs.

BPI is set to merge mobile microfinance banking arm BanKO with web-based bank for overseas Filipinos BPI Direct Savings Bank and build up the branch network to 100 by next year, said Natividad Alejo, BPI executive vice president and head of retail clients and BPI Family Savings Bank president.

The BPI group currently has 819 branches, including those of consumer lending-focused thrift bank arm BPI Family Bank.

The merger seeks to combine an entity that has ample capital (BPI Direct) with another entity that seeks to reach out to the underserved self-employed microentrepreneurs across the country. BPI Direct, the Philippines’ first internet-based bank, has over P1 billion in capital, Alejo said.

In a chance interview, Alejo said many entrepreneurs have deposits but are unable to access formal lending channels.

Micro, small and medium enterprises are considered as the backbone of the domestic economy. Many of them, however, are forced to operate in the informal channel or borrow from informal lenders at prohibitive interest rates.