Integrating Alternative Channels into

SME Banking Value Proposition

IFC SME Banking Conference 2013 with AMF

Jumeirah Emirates Towers, Dubai

7-8 May 2013

Teresita B. Tan

President, BPI Globe BanKO

Philippines

The huge opportunity . . .

• With unbanked D & E market

• And the country’s 75% mobile phone penetration

5% 95%

Source: Mercy Corps & BFA 2010

And Smart Telecom website Private and Confidential 2

Private and Confidential 3

. . . Access to Finance 86 Mn active mobile phone

or 75% of Filipinos

11,328 ATMs

50K POS

9,207 bank

offices

26% Filipinos have

access to formal

financial channel

2.2 Mn Overseas

Filipino Workers

send remittance

regularly

610 out of 1634 (37%)

Municipalities have

no banking office

2 Bn SMS

daily

99% mobile

phone coverage

Source: BSP thru Nancy

Llaguno

Private and Confidential 4

. . . Led to a milestone partnership

Ayala Corporation

Bank of the Philippine

Islands Globe Telecom

Involvement in

socioeconomic

development

Banking

excellence,

leadership and

manpower pool

Expertise in

telecommunication

and mass

acquisition

Private and Confidential 5

Creating a Bank for Every Filipino

BPI Globe BanKO Inc.,

is the Philippines’s first mobile phone-based,

microfinance-focused savings bank

primarily serving the unbanked & under-banked

D&E economic class ($2/day earner)

farmer students

tricycle driver

small business

market

sellers

Private and Confidential 6

With services and security like any BANK

Traditional Banks BPI Globe BanKO

• BanKO is also regulated by the Central Bank (BSP)

• BanKO deposits are also insured by Phil Depository Insurance Corp (PDIC)

• BanKO clients get an ATM Card usable at ALL ATMs nationwide

• BanKO ATM Card will soon be accepted at ALL POS nationwide

Delivering via 2K+ Outlets, a “branchless model”

9 BanKO Regional Office

Sari Sari Store 7

Pawnshop

Gas Station

Money Changer

Community Center

MFI or Rural Bank

Drug Store

Private and Confidential 7

Private and Confidential 8

PondoKO

PaniguroKO

Bundled Savings Account Product

PuhunanKO

• Savings Account, the enabling account

• With Free Life Insurance

• Multi-Purpose Loan via mobile

• With 100% backed deposit initially

• Based on scorecard, deposit backing will be reduced

• Voluntary Property Insurance with accidental death rider

• Against Fire, Flood, Earthquake and Lightning

. . . Leads to Mobile Financial Services

Runs Mobile phone even with NO Airtime Load

9 9 Utility

Billers

Sellers

BanKO Partner Outlet

P12.50 vs P70

Free vs P10

No POS device

10% rebate

No docs, no exclusion Avail of Credit

Line like card

Less credit card

Save time, transport

Private and Confidential 10

Security Features

Can use any model of

Mobile phone

SMS confirmation

for all transactions

MPIN is required

for all transaction

Instantly, transactions available

In BanKO Link, web-based

First Factor: “you own” Second Factor – “you know”

Confirmation & ALERTS

Audit Trail, Permanent

Record & Backup to Telco

Private and Confidential 11

BanKO Loans to MFI and Enterprises

Value Chain

Financing thru

Distributors • Loans to MFI clients

• Enables MFI to grow

portfolio beyond

capital

• MFI remains face to

clients

• Shared credit risk

• Credit Line to Retailer

• Solely for purchase of

Distributor product

• Distributor provides

Retailer credit history

and purchases

Co-Funding

thru MFI

Scorecard-

Based Multi

Purpose Loan to

Depositors

• Deposit and

transactions serves as

credit history

• Deposit backed loan

• Score Card based

lending

Private and Confidential 12

B2B Value Chain Loan - SME

Private and Confidential 12

3. Construction Company uses mobile phone to avail of credit line as payment method

PAYMENT RECEIVED! 4. Hardware

receives payment real time

5. Construction Company pays for loan on due date

2. Construction Company orders materials from accredited Hardware

1. Construction Company submits bill of materials

Private and Confidential 13

Acquisition

Retailer pays

BanKO

BanKO collects

signed loan

Documents

from Retailer

1-1 Profiling

& Loan Kit

Distribution

Document

Submission Activation Availment

B2B Value Chain Loan – MSME

Payment

1 2 3 4 5

BanKO visits each

Retailer, profiles and

distribute generic loan

kit

BanKO creates

Retailer loan

credit line

Retailer avails,

BanKOreleases

loan with auto

transfer to

Distributor

14

BanKO

Assembler is an MFI/COOP/NGO

Farmer

Input Store

1. ISSUE P.O. SMC issues PO to Assembler

2. APPLY Farmer applies for loan at MFI

4. CREDIT LOAN Farmer gets a credit line

3. PROCESS LOAN Collects docs & input supply breakdown

5.AVAIL Farmer avails loan for credit to various input store as needed

Agri Value Chain Loan with MFI

Mobile

Hotline

Website

Social Media

Media Branch

BPO

BDS

Family Friends

BanKO reaches customers thru various channels

Hotline 2882

24x7 toll-free

www.banko.com.ph

Facebook

Eat Bulaga TV

Show

6 branches nationwide

3 regional administrators

*118*1# (toll-free) and

SMS confirmation

2,100 partner

outlets nationwide

Family bundles*

Referral

program*

Events,

caravans

Private and Confidential 15

Thank You