Philippines: RP’s 1st Mobile Microfinance Bank Gears up for Full-Blast Operations

Oct 2009
Makati City, Philippines, October, 12 2009 - The Bangko Sentral ng Pilipinas (BSP) has approved the ownership structure of the country’s first mobile microfinance bank, with Bank of the Philippine Islands (BPI) transferring a 60-percent stake in unit Pilipinas Savings Bank Inc. (PSBI) to Globe Telecom Inc. and Ayala Corp. and keeping the balance of 40 percent.

BPI, the country’s biggest bank in terms of market capitalization, has agreed to transform PSBI into a bank providing wholesale loans to microfinance institutions in the country.

In a disclosure to the stock exchange on Monday, BPI said it had obtained BSP approval for the share transfer.

Affiliate Globe has been given a 40-percent stake in the microfinance venture, while parent Ayala has agreed to take up a 20-percent equity.

With the BSP’s approval, the microfinance bank has moved closer toward full-blast operations.

The Ayala group is awaiting BSP approval for the change of name of PSBI and its application for an electronic-banking license.

In August BPI president Aurelio Montinola III said up to P4 billion might be made available by the new lending institution to borrowers.

The bank, which is expected to roll out its operational systems for loans and deposits before the year ends, has an authorized capital of P500 million.

Montinola said the group would eventually venture into retail lending, making more loans available, particularly in rural areas where banking service is still not available.

The bank will likely go into full-blast operations by next year, according to the BPI chief executive, complementing BPI’s ongoing wholesale lending program for microfinance institutions that lend up to P150,000 to groups and individuals managing small businesses.

Globe, the No. 2 telecom service provider in the country, has a tie-up with a number of rural banks and microfinance institutions involving the use of its innovative G-Cash product, an SMS-based technology, for money transfers and loan collection.

G-Cash subscribers can turn their mobile phones into an electronic wallet that allows them to pay for goods and services via text. Rival Smart Communications Inc., the mobile-phone unit of Philippine Long Distance Telephone Co., offers a similar service called Smart Money.

Source : Business Mirror

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