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The Bangko Kabayan experience as an Economy of Communion enterprise
Citation preview
Teresa GanzonJanuary 27, 2011
Bangko Kabayan: A Case Study of
Microfinance and the Culture of Reciprocity
The Philippines
Developing nation
Population = 96 Million
About 1/3 (32.9%) of whom live below the poverty line, earning less than $2 a day
Microfinance in the PhilippinesThe government has been encouraging
private sector, including the formal banking sector, to introduce and offer microfinance services.
Few formal financial institutions have chosen to engage in microfinance.
Today, only about 10-15% of the 680 rural banks dispersed in the Philippine countryside offer microfinance products.
53-year old Philippine rural bank in the province of Batangas
Grew its resources and loans, mostly fueled by rediscounting funds from the Central Bank
Experienced disastrous results in the ‘70s causing it to nearly close down from wholesale defaults
We became very conservative in lending and only accepted loans secured by hard collateral
Bangko Kabayan, 1957
Economy of Communion
A business does not exist to produce profits only for its owners, but for the following purposes: For those in need in the community For structures of formation For reinvestment into the company
Paradigm consistent with the distributive nature of social enterprises
Paradigm Shift
From traditional, collateral-backed lending to unsecured microfinance technology
Strict monitoring of accounts
Hiring and recruiting qualified field personnel
Acquiring competencies in cash flow and character-based risk assessment
Our true calling
Focus group discussions
Product Development
Educational Loan
Micro- insurance
Housing
Microfinance
Grassroots Entrepreneurship Education
Opportunity Seeking
Understanding Financial
Statements
marketingHuman Resource Management
OPERATIONS
Clients giving back
Community Development Officers (CDOs)rolling out the Entrep Eskwela Program in
different microfinance centers
Conclusion
Transformation from a traditional, collateral-based lending institution into one that has been able to adopt microfinance unsecured lending
Even as a microfinance-oriented institution, we have chosen to do things differently. We do not wish to grow in a manner where relationships from within the enterprise and with the clients will be secondary to “standardization and structure”.
This is a challenge we face today – and every moment of our enterprise life: to balance the demands of business while not losing track that man and relationships are primary and central.