Banco Dipolog’s HMF product undergoes operations review

August 26, 2011 By Leave a Comment

The United States Agency for International Development-supported Rural Bankers Association of the Philippines-Microenterprise Access to Banking Services (RBAP-MABS) Program conducted an operations review of Banco Dipolog’s housing microfinance (HMF) product last August 23-25. The technical assistance was designed to assess the product’s performance, determine and evaluate its strong points and areas for improvement, and provide recommendations for product enhancement. During the conduct of the product review, the bank staff were also trained to develop the bank’s internal capacity to conduct their own product operations review. The training provided the staff with the tools, processes and techniques to conduct a product review.

Left photo: Banco Dipolog building prior renovation. Banco Dipolog new building as of August 2011

Left photo: Banco Dipolog's building prior to renovation. Banco Dipolog's new building as of August 2011

Banco Dipolog has been a MABS participating rural bank since 2000.  They have disbursed more than 13,600 microfinance loans totaling more than PhP 326 million since they introduced microfinance services at the bank.  Banco Dipolog, formerly known as the Rural Bank of Dipolog, has gone through several major changes and have further invested in developing their branch offices and changed their brand and overall image in the community.  The bank, with over PhP 900 million in total assets and more than 5 branches and other banking offices is also planning to open up several Micro Banking Offices in the coming year and is now accredited to offer mobile phone banking services via the GCASH platform.  With a renewed effort and commitment to focus on microfinance, the bank is gearing up to become a major microfinance provider in its region.

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Bangko Kabayan undergoes HMF product operations review and operations review training

April 30, 2011 By Leave a Comment

BK HMF Ops RevThe USAID-supported RBAP-MABS program conducted an operations review of Bangko Kabayan’s housing microfinance (HMF) product on April 26-29. This was to assess the performance and status of the bank’s HMF product, evaluate its strong points and areas for improvement, and provide recommendations based on the review to further enhance the product design and operational system.

Based in Batangas, Bangko Kabayan began the pilot phase of its housing microfinance product in September 2009. Since then, the product has already been rolled out to 13 of its 15 branches, reaching over 379 new borrowers by the start of this year.

Aside from the actual operations review, RBAP-MABS also trained some of the bank’s staff to develop and strengthen its capacity to conduct an internal product operations review. Selected participants from the bank’s marketing and audit departments went through specialized hands-on training on operations review tools, processes and techniques. To ensure impartiality in conducting reviews, the bank selected participants who are familiar with microfinance, but are not involved in the operations of the HMF product.

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Mindanao rural banks complete Housing Microfinance training

April 7, 2011 By Leave a Comment

HMF TrainingFour Mindanao rural banks completed the RBAP-MABS training course on housing microfinance (HMF) held last April 4-6 in Butuan City.

The 2nd phase of a two-part HMF training course, the workshop provided the banks with the tools to complete their loan product manual and financial projections. Rural Bank of Labason and Rural Bank of Cotabato both plan to introduce their housing loan product during the first semester of this year. On the other hand, Cantilan Bank and Green Bank, which have been offering HMF loans in some of their branches since 2008, will be rolling out the product to more branches.

The training provided the participants with additional tools and the opportunity to validate their proposed product features using the results of the market research. It also allowed the participants to experience conducting focus group discussions with clients firsthand. Finally, RBAP-MABS drilled the trainees on cash flow analysis, especially when handling clients with dual loan accounts. The training team guided the participants on the step-by-step process of finalizing the product manual.  The participants valued most their learning experience from the focus group discussion conducted with loan clients and the cash flow analysis.

The USAID-supported RBAP-MABS Program initiative in housing microfinance began in 2008.  To date, 60 bank units of seven (7) rural banks offer micro housing loans to their clients. BSP Circular 678, which was issued by the Bangko Sentral ng Pilipinas in January 2010, is encouraging more banks to add housing to their suite of microfinance loan products.

As of January 2011, 2,092 borrowers have received housing loans worth over P85 million primarily for home improvements. The Circular permits banks to lend to microfinance clients up to PhP300,000 with tenor up to 15 years for home or lot acquisition or home construction.

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RBAP-MABS Program trains more rural banks for Housing Microfinance

February 19, 2011 By Leave a Comment

HMF training 1Twelve bank officers and staff from four Mindanao-based RBAP-MABS participating rural banks gathered in Cagayan de Oro City on February 16-18 for a 3-day training on Housing Microfinance. Conducted by the USAID-supported RBAP-MABS program, the training provided the participants with the platform and process for designing and adding housing micro loan in their suite of products for microfinance markets.

Of the four banks that underwent the training, two rural banks are both interested in designing and offering a market-driven micro loan product for housing purposes, aiming to do the roll-out within the first semester of this year. The other two banks, on the other hand, are both poised to rollout their existing housing microfinance product to more branches.

The training, which covers phase 1 of the two-phase training course, grounded the participants on the guiding principles and step-by-step approach for developing products. RBAP-MABS trained the participants on the use of market research tools and guided them in an actual field market survey exercise with existing and potential clients in Cagayan de Oro City.  Through this exercise, the participants were able to appreciate the importance of the market survey tool and its application not just in a housing microfinance loan product, but also in any bank product or service. [Read more...]

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The State of Housing Finance in the Philippines

December 8, 2010 By Leave a Comment
RBAP-MABS Deputy Chief of Party Meliza Agabin shares her learnings from the Housing Forum held on December 7 at the Asian Institute of Management (AIM)
Professor Veronica Cacdac Warnock, a Visiting Professor at the Asian Institute of Management (AIM), highlighted findings of her comparative assessment of housing finance around the world at the forum to rethink housing policy, reshape the housing and urban landscape, and reinvigorate communities. The cross-country study conclusion indicates that countries with stronger legal rights, better provision of credit information, and a less volatile macroeconomic environment have larger housing finance system.
Based on these variables, according to the study, the “Philippines lags behind other countries in the provision of housing finance because its bankruptcy and collateral laws are not conducive to the provision of housing finance, and its credit information systems are not strong enough to allow lenders to easily assess the riskiness of prospective borrowers.”
The forum, held on December 7 at the Asian Institute of Management (AIM), was attended by senior executives and leading representatives of the government, banking sector, private business developers, non-profits, and academic community.
The forum was intended as the first of a series of conversation about housing issues in the country with the intention of finding out what strategies work and how every sector can contribute to addressing the demand and supply constraints in the Philippines where the population is quickly urbanizing. In 2005, the country’s urban population comprised 62.7%; by 2030 urban population is projected to comprise 77% of the Philippine population. As a consequence, the urban population slum is expected to increase in number (close to 23 million) and will make up more than 43% of the urban population. Providing decent and affordable housing for them as well as others at the bottom of the economic pyramid becomes a major challenge. Discussions during the forum point to the need to scrutinize past government policies and strategies on housing, and the imperative of using a different set of lenses for crafting more effective policy and regulatory options that ensure the poorer sector really benefit.
The presentation made by the USAID-supported RBAP-MABS Program on the initiative to support rural banks in offering and developing housing microfinance products emphasized why it is important for banks to focus more on character-and-cashflow-based lending rather than only collateral-based lending.  The presentation also emphasized the response of private rural banks to the demand for housing microfinance without the need for government wholesale funds and/or guarantees. Rural banks have so far served mostly the demand for incremental home improvement and repairs of micro business owners, a market that rural banks are familiar with. They also finance clients who are incrementally building their homes step-by-step.

RBAP-MABS Deputy Chief of Party Meliza Agabin shares her learnings from the Housing Forum held on December 7 at the Asian Institute of Management (AIM)

Professor Veronica Cacdac Warnock, a Visiting Professor at the Asian Institute of Management (AIM), highlighted findings of her comparative assessment of housing finance around the world at the forum to rethink housing policy, reshape the housing and urban landscape, and reinvigorate communities. The cross-country study conclusion indicates that countries with stronger legal rights, better provision of credit information, and a less volatile macroeconomic environment have larger housing finance system.

Based on these variables, according to the study, the “Philippines lags behind other countries in the provision of housing finance because its bankruptcy and collateral laws are not conducive to the provision of housing finance, and its credit information systems are not strong enough to allow lenders to easily assess the riskiness of prospective borrowers.”

[Read more...]

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