The Rizal Commercial Banking Corporation’s (RCBC) Microfinance arm Rizal Microbank and the Asian Bankers Association (ABA), recently conducted a two-day course on microfinance as a business initiative for delegates of ABA member banks from Indonesia, Iran, Taiwan, and Vietnam.
Held on January 28-29, 2013 in Manila, the Microfinance Appreciation Course aimed to impart the best microfinance practices and experiences to ABA member banks through several lectures and field exposure visits to Rizal Microbank clients.
RCBC President & CEO and ABA Chairman Mr. Lorenzo V. Tan, in his opening remarks, stressed the need to provide a safer and more reliable means of loaning money for self-employed entrepreneurs or microentrepreneurs given the Philippines’ pyramidal distribution of wealth and progressive economy.
“There are a lot of behaviors here that are unique to our culture and a lot of consumer companies take advantage of that. Our vision in RCBC is for small businessmen to start in a microfinance business. Then as they build their wealth, they move to our small-medium enterprise and then over time they move on to the corporate bank. So as you can see, there is a whole progression,” said Mr. Tan.
A lecture workshop was held during the first day of the course wherein Rizal Microbank’s President Ms. Lourdes S. Pineda and First Vice President and Operations Head, Mr. Raymundo C. Roxas discussed the basics of microfinance lending, the characteristics of a microentrpreneur, and the approaches used by lending institutions as well as their corresponding performance indicators.
The session was capped with a lecture focusing on RCBC’s microfinance experience as a universal bank. “So far, our microfinance performance data has been impressive. As of 2012, we have a total number of close to a thousand active borrowers. We’re eyeing to expand our geographical reach in the future as of now, we have branches and microfinance banking offices in Southern Luzon and Mindanao,” said Mrs. Pineda.
The two-day Microfinance Appreciation Course concluded with a full-day field exposure visit to Rizal Microbank clients with various businesses, loan sizes & loan tenors in Tanauan City, Batangas located one-hour drive south from Manila. The four visited clients were engaged in the: (a) eatery business, (b) motorcycle parts and repair shop; (c) wholesale and retail of dried fish; and (d) wholesale and retail of LPG and selling of home appliances.
Microfinance Promotion: Part of ABA s Policy Advocacy Work
Promotion of microfinance is currently an important part of ABA s policy advocacy work. The ABA recognizes that the microfinance industry globally has achieved significant milestones, increasing access to financial services for people at the bottom of the pyramid.
In particular, the progress and growth of the industry in Asia has been unprecedented. Over the years, the industry has evolved to include the diversity of stakeholders from NGOs, small and medium microfinance institutions, large-scale microfinance institutions, finance companies, development banks, and commercial banks, with varied development approaches, delivery methods, products and services to broaden the scope to reach and empower low-income people.
It is in this context that the ABA has decided to identify and implement programs that would encourage the banking sector to take advantage of emerging opportunities in microfinance and assume greater involvement in the financial inclusion landscape. One such program is the holding of the Microfinance workshop, whose primary objective is to provide our member banks, particularly those who are interested to engage in microfinance as a business initiative, the opportunity to learn from the experience, best practices, and expertise of RCBC and Rizal Microbank, which are already successfully engaged in microfinance operations.
Through the workshop, the ABA hopes to provide another valuable opportunity for our members to exchange views and share experiences on microfinance as one business activity that its members can engage in, in order to sustain and grow their banking operations.