Cebuana Lhuillier adding 150 branches this year to serve MSMEs

Cebuana Lhuillier branch on Chino Roces Avenue. PHOTO BY EDWIN BELLOSILLO

Microfinance provider Cebuana Lhuillier is planning to open around 150 branches this year, expanding its footprint in underserved areas as it ramps up initiatives for micro, small, and medium (MSMEs) enterprises.

Cebuana Lhuillier president and chief executive Jean Henri Lhuillier told reporters on the sidelines of the Kanegosyo Center Program in Parañaque that the branches would most likely be put up in the Visayas and Mindanao.

“That’s where we are focused on and going. We are fairly saturated here in the [National Capital Region] so we are looking at Visayas, Mindanao,” he said.

Cebuana Lhuillier currently has 3,000 branches nationwide, serving close to a million entrepreneurs in the MSME sector to date, according to the company.

Lhuillier said the company was also planning to increase by almost 4,900 percent the average loan amount extended to MSMEs to around P300,000 to P500,000 next year from the current P10,000 to P15,000.

Even with rising rates

The Cebuana Lhuillier executive added that while default rates have gone up, these remained in the low single digits and should still be manageable to borrowers.

“We’ve improved our collection system. We’ve improved our information system in terms of letting our clients know that they have payments to take care of. And we have also extended the payment duration to make sure that they have time to pay,” Lhuillier said.

Annette Tirol, Cebuana Lhuillier senior vice president and group head for customer engagement and market development, said growth in the company’s loan portfolio was driven mostly by MSMEs in the retail sector.

“They are mostly into the retail type of businesses, whether its retail at the storefront or selling online,” she said.

The company is also looking to onboard more MSMEs into its Kanegosyo Center Program, which has reached over 100,000 so far, as part of efforts to help smaller enterprises.

The program offers comprehensive guides and assistance on government processing requirements, while functioning as a one-stop platform that provides market access to micro loans, insurance and savings accounts.