Enhancement of Coastal Community Economic Wanasari
PT Pertamina (Persero)
Rizal MICROBANK is strongly committed to optimally utilizing its resources and expertise to grow its outreach while maintaining high quality portfolio by implementing IT-enhanced microfinance operations
INTRODUCTIONThe Microfinance Initiative carries out the bank’s mission to provide financial access to micro entrepreneurs and other small business individuals at the base of the financial pyramid.
Micro entrepreneurs, typically small enterprising individuals, use rudimentary or obsolete equipment to run their operations, with no marketable collaterals to offer, and low levels of education.
The Microfinance Initiative began in 2009 with the intention of serving the untapped micro entrepreneurs market. Rizal MICROBANKhas since adopted an individual lending methodology and employs a character- and cash flow-based credit underwriting process to provide micro entrepreneurs an easier access to lending.
Rizal MICROBANK is strongly committed to optimally utilising its resources and expertise to grow its outreach while maintaining high quality portfolio by implementing IT-enhanced microfinance operations. Through the IT-enhanced microfinance operations, Rizal MICROBANK will also specialise in under-banked and under-served areas with thriving microenterprise communities thereby spurring local economic growth.
FRAMEWORK AND STRATEGYRizal MICROBANK concentrates on the market niche of micro entrepreneurs, who are served by neither non-bank microfinance lenders (NGOs) nor formal lending institutions (banks). At present, RCBC is the only Philippine private universal bank to go into retail lending in this market, through Rizal MICROBANK.
To improve operating efficiency, the bank implemented its microfinance-focused integrated core banking system, thus, substantially improving loan turnaround times. It now takes less than 5 days to process and disburse a new loan, while a recurring borrower can get his next loan within 24 hours.
Rizal MICROBANK implements individual lending as its microfinance credit methodology for all its products as it is flexible and offers a detailed assessment of the client, client’s family and business.
Borrowers of Rizal Microbank are assessed based on their present cash flows and capacity to pay, demonstrating that collateral is not the primary consideration for the loan qualification process.
ACHIEVEMENT AND IMPACTSince it started its microfinance operation in July 2009, Rizal Microbank has disbursed 11,900 loans to 2,938 individuals with an aggregate disbursed amount of over $19 million. Rizal Microbank presently has an outstanding loan portfolio of P78.4 million, with Luzon and Mindanao accounting for 47% and 53%, respectively.
Some of Rizal Microbank’s accomplishments werethat they were able to improve the livelihood of MarivicAbanto, of Batangas province, who is a wholesale and retail trader of dried fish; NormindaRegala, of Tanauan City, Batangas, who is the owner of an eatery business; Jhonnel Trinidad, of Tanauan City, Batangas, who is the owner of a motorcycle parts and repair shop. The micro entrepreneurs were given easy access to the bank’s loan services. As a result of the loans, these micro entrepreneurs were able to start up their own respective businesses as well as finance expansions and improvements to their respective businesses’ facilities and equipment.
FUTURE DIRECTIONRizal MICROBANK aims to implement specific strategies to provide its clients with easy access to a financial services provider that understands their needs. For that reason, Rizal MICROBANK looks to branch expansions one of its future strategic plans. At the moment, Rizal MICROBANK has 14 branches and it expects to open up an additional 13 branches as well as microfinance banking offices within the current year of 2013.
Rizal MICROBANK, a subsidiary of one of Philippines’ top universal banks; Rizal Commercial Banking Corporation (RCBC), serves as the microfinance banking arm of RCBC, and envisions a viable and sustainable microfinance operation geared towards providing Filipinos enterprising low-income households and micro enterprises with access to financial services.