Post on 30-Dec-2015
BUKIDNON COOPERATIVE BANK
(BCB)MICROFINANCE EXPERIENCEMICROFINANCE EXPERIENCE
OUTLINE OF PRESENTATION
The City of Malaybalay Bukidnon Coop Bank Institutional Profile Previous Microfinance Experience of BCB BCB’s Present Microfinance Experience Features of BCB’s Microfinance Product Performance of SIKAP Program for the
First Three Months Pilot Test
The City of Malaybalay
First City in the Province of Bukidnon Capital of the Province of Bukidnon 44 barangays Total population of 105,459 as of 1998 Total of 12,354 households as of 1998 Primary source of income: Farming
&Trading
The City of Malaybalay
Has 6 commercial banks Has 2 Rural Banks Has 2 active credit cooperatives Has several pawnshops & lending
investors Has 1,795 registered business
establishments as of January, 1999
BANK PROFILE First coop bank in Mindanao 1998 Gawad Pitak Awardee as # 1 Coop
Bank in the country Established in 1977 Has 4 branches including main office (
Valencia, Maramag, Quezon ) Total resources of P80,479,999.98 Has 35 employees; 19 in main office, 16
in 3 branches
BCB (Main Office) Organizational Chart
Board of Directors
General Manager
Accountant Cashier Loans Officer
Bookkeepers
Tellers/ Solicitor
s
Account Officers
Regular Loans
MF Supervisor
Account Officers
Microfinance
BANK’S PRODUCTS
DepositsSavings- P8,283,337.81Time -P16,086,090.55
Loans Agricultural - P34,906,242.38Commercial - P9,817,702.16Other Loans - P9,529,383.46 P54,253,328.00
BCB’S PREVIOUS MICROFINANCE
EXPERIENCE
BCB previously offered two microfinance products: Market Vendors’ Loans Motorela & Multicab Maintenance
Loans
MARKET VENDORS’ LOANS
LOAN FEATURESLOAN FEATURES Introduced for stall owners in 1979 Clean loan up to P5,000.00 Above P5,000.00 is collateralized Payable in 6-12 mos with 12% p.a.
interest Collected daily/weekly/monthly/lumpsum Deposit required before loan availment
but no deposit build up thereafter.
MOTORELA & MULTICAB MAINTENANCE LOAN
LOAN FEATURES Intended for motorela & multicab
operators Loans up to P15,000.00, with Chattel
Mortgage or Real Estate Mortgage Payable in 6 moths to 1 year, mostly
lump sum upon maturity Pre-paid interest of 22% p.a.
PROBLEMS ENCOUNTERED
No product manual or guidelines Past Due Ratio of more than 50% Savings Deposits became dormant Market value of tricycle mortgaged
not sufficient to cover loan upon foreclosure
Product was stopped by the bank after 2 years
BCB’S EXPERIENCESAS PARTICIPANT BANK OF AS PARTICIPANT BANK OF
THE MABS-M PROGRAMTHE MABS-M PROGRAM
Bank’s Initial Perception on Bank’s Initial Perception on MicrofinanceMicrofinance
High operating cost & manpower intensive
Small loan amounts mean lower profit Risky since it’s clean & caters to small
clients Market for small entrepreneurs is
already saturated by informal moneylenders
Factors that Convinced the Bank to
Resume its Microfinance Activity
Micro borrowers are not interest conscious Close monitoring, clear guidelines & deposit
build up mitigate risk Frequent collection = high effective income Bank’s bad experiences in big loans Technical assistance from MABS-M will instill
new discipline in implementing the product
BCB’S NEW MICROFINANCE
PRODUCTSariling Impok, Kita at
Pag-asenso ( S I K A P )
TARGET CLIENTS
Sariling Impok, Kita at Pag-asenso
( S I K A P )
PRODUCT FEATURES Intended for microentrepreneurs Loan sizes of P3,000.00 up to P10,000.00
for first time borrowers 3% monthly interest amortized equally 3% service fee deducted up front Loan term : 30, 60 & 90 days Mode of payment : daily & weekly Pick up service for loan payments &
deposit
Sariling Impok, Kita at Pag-asensoSariling Impok, Kita at Pag-asenso( S I K A P )( S I K A P )
PRODUCT FEATURES
Loan Security : P3,000.00 - P15,000.00 ; two co-makers only P15,001.00 - P25,000.00 ; two co-makers plus
Deed of Assignment of Deposits
Above P25,000.00 - REM or Chattel Mortgage Deposit Build up:
Initial deposit at least equivalent to 5% of loan
Regular deposits to go with each loan payment
Sariling Impok, Kita at Pag-Asenso ( S I K A P )
INCENTIVES TO GOOD PAYORS
Eligibility ( not automatic ) for bigger loan within discounted debt capacity
1/2% reduction of interest rate subject to Manager’s approval
Immediate release of repeat loan upon full payment of existing loan
ACCOMPLISHMENTS OF SIKAP LOAN FOR THE FIRST
3 MONTHS PILOT TEST
-
50
100
150
200
250
300
350
400
450
Aug-99 Sep-99 Oct-99 Nov-99 Dec-99
Number of Active Borrowers and Outstanding Depositors
ActiveBorrowersActiveDepositors
PERFORMANCE OF SIKAP LOAN PROGRAM FOR THE FIRST 3
MONTHS PILOT TEST
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
Aug-99 Sep-99 Oct-99 Nov-99 Dec-99
Amount of Loan and Deposit Portfolio
Loan PortfolioBalanceDepositBalance
SIGNIFICANT THINGS LEARNED FROM THE MABS-M PROGRAM
Market study prior to product design Product designed according to market
needs Loan administration procedures
documented in the Product Manual All borrowers are required to attend Client Orientation Loan forms are properly filled up
SIGNIFICANT THINGS LEARNED FROM THE MABS-
M PROGRAM Thorough character and credit
checking Thorough cash flow evaluation Very conservative determination of
debt capacity Simplified & fast processing of loan
releases Zero tolerance to delinquency
SIGNIFICANT THINGS LEARNED FROM THE MABS-M PROGRAM
ALARM SIGNALS IN MANAGING DELINQUENT PAYORS
ALARM SIGNALS & RECOMMENDATIONS
ALARM SIGNAL # 6 PAYMENT DELAYED 4 WEEKSIMPOSE CHATTEL; KASABUTAN
ALARM SIGNAL # 5 PAYMENT DELAYED 3 WEEKSFINAL LETTER FROM MANAGER
ALARM SIGNAL # 4PAYMENT DELAYED 2 WEEKSSECOND WARNING LETTER
ALARM SIGNAL # 3 PAYMENT DELAYED 1 WEEKINFORMS CO-MAKER ; FIRST LETTER
PAYMENT DELAYED 3 DAYSSUPERVISOR VISITS OVERDUE CLIENT
ALARM SIGNAL # 2
ALARM SIGNAL #1 PAYMENT DELAYED 1 DAYLOANS STAFF REPORTS TO SUPERVISOR
Daghang SalamatDaghang Salamat !
“There is no truth to the saying that the poor does not pay or cannot save. All it takes is discipline which should first come from the bank. Our failures in handling microfinance in the past was mainly caused by the poor product design and our laxity in handling collections.”
-Mr. Romy Garcia, Chairman