Loan sharks, 5-6? Here’s a lifeline for Laguna’s small entrepreneurs

BPI Direct BanKo opened its 200th branch in Los Baños on March 12, promising better days ahead for small businesses and OFWs.


LOS BAÑOS — Nenita Mamaril has been selling cassava cakes for more than 14 years. In all those years, she faced a persistent problem: securing extra capital to maintain and expand her business. With little to no alternative, she was forced to turn to loan sharks, often paying as much as Php4,000 a day for the high interest and a small portion of the principal. As a result, Mamaril’s business, Net’s Cassava Republic, hardly flourished as she got trapped in a vicious cycle of indebtedness.

But Mamaril has reason to be optimistic these days: She is one of the beneficiaries of BPI Direct BanKo, which offers small and medium enterprises (SMEs) like hers low-interest loans. BPI Direct BanKo opened its 200th branch in barangay Maahas last March 12, 2019, which Mamaril attended.

BPI Direct BanKo beneficiary Nenita Mamaril shares to the public how BPI’s microfinance loans have helped her business flourish. (Photo by Jervis Gonzales)

A subsidiary of the Bank of the Philippines Islands, BPI Direct BanKo is a microfinance enterprise for SMEs. Since its inception in 2017, it has assisted over 45,000 clients and is looking forward to help over 85,000 clients by the end of 2019.

High interest rates

Microfinance companies are crucial because these are a more viable alternative compared to informal lending services, said Rob Mabiasen, head of BPI Direct BanKo’s Microenterprise Loans and Branch Network. Although informal loan services are easier to avail as most do not require paperwork, these loans tend to have higher interest rates coupled with a daily payout. This, Mabiasen said, drains out earnings or savings of SMEs.

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In order to encourage SMEs to avail of microfinancing from reputable companies and discourage the use of informal loaning services, BPI Direct BanKo only requires SMEs to present a barangay or mayor’s permit along with valid IDs for loans below Php100,000, while small assets like motorcycles can be used as collaterals for loans above Php100,000. BPI Direct BanKo offers lower interest rates ranging from 2.5% to 4% and loanable amounts ranging from PhpP25,000 to Php300,000 depending on the loan scheme.  These rates, according to BanKo president Jerome Minglana, are “one of the lowest, if not the lowest among microfinance loan providers.”

Although a bank account with BPI is not necessarily a requirement for the loan, Minglana said BPI Direct BanKo encourages clients to open a bank account afterwards that will be used to settle their loans but also for savings purposes. “We want to set up the behavior of savings among our clients. We want to teach them the value of savings,” Minglana said.

Los Baños officials expressed gratitude to BPI Direct BanKo for choosing to open its 200th branch in the town. “Malaking tulong ito para sa mga mamamayan ng Los Baños na nangangailangan ng tulong-pinansyal,” said Robert Laviña, Los Baños municipal administrator.

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BanKo Chairperson Simon Paterno and Mary Jane Corcuera of One-stop Migration Resource Center cut the ribbon during the opening program of Banko’s 200th branch in Los Baños. (Photo by Jervis Gonzales)

Los Baños board member Ruth Hernandez said residents need advice from experts and opportunities to start or expand their business. “Marami po talaga dito na gusto po magsimula, magtayo ng negosyo. They need advice from experts at magkaroon din ng pagkakataon na makapag-loan,” she said.

Help for OFWs, too

Mary Jane Corcuera, head of One-stop Migration Resource Center from the Office of the Governor’s Public Employment Services Office (PESO), said BPI Direct BanKo can help not only SMEs but also OFWs and their families who plan to open businesses. “BPI and BanKo have been part of our advocacy to promote investment among OFW families,” she said.

It is important to sustain the livelihood of OFWs families when they no longer work abroad. One way to do that is by going into business, said Mabiasen of the Microenterprise Loans and Branch Network, stressing the importance of saving up among OFW families.

Mamaril, the owner of Net’s Cassava Republic, attests to BPI Direct BanKo’s effectiveness. She settled her outstanding loans within a week of her loan filing, allowing her to secure a bigger capital to grow her business. Freed from the clutches of high-interest lending, Mamaril was able to develop parts of her house and also build a small factory and office. “Maganda na po ang aking tindahan ngayon. Very presentable na po yung tindahan,” she said. (Laguna Now)