RCBC plans micro-branches

YUCHENGCO-led Rizal Commercial Banking Corp. (RCBC) yesterday said it will open eight micro-banking offices (MBOs) and expand its microfinance portfolio, becoming the first bank to announce so after the central bank came out with regulations allowing the country’s banks to open these small offices.

In a disclosure to the stock exchange, RCBC, the country’s seventh largest in asset terms, said it will open these MBOs between now and July next year.

“RCBC projects it will hit the P200 million disbursement threshold by July 2011, supported by three new MBOs in Southern Luzon and five new MBOs in Southern Mindanao,” it said.

It reported it had disbursed some P102 million in microfinance loans as of October 22. It began its foray into microfinance -- a highly profitable business -- in July 2009 after buying a rural bank and a thrift bank.

Last October 14, the Bangko Sentral ng Pilipinas issued Circular No. 694 that allowed banks to establish MBOs, also known as microfinance OBOs.

While an “other banking office” is limited to doing marketing, customer care services, acceptance of loan applications, and other “non-transactional” banking services, an MBO can accept microdeposits, release micro-loans, sell microinsurance products, accept utility payments and purchase foreign currencies, among others.

The central bank said the new rules are intended to encourage banks to venture to underserved areas, noting that 610 out of 1,635 of the country’s cities and municipalities are without a single banking office.

RCBC acquired Jose P. Laurel Rural Bank, Inc. based in Batangas in February 2009 and Merchants Savings & Loan Association, Inc., which had branches in Mindanao, in May 2008, becoming the first large bank to go into microfinance.

Microfinance, dominated by rural and thrift banks and other microfinance players, was thought to provide new revenue streams to the large banks.

RCBC’s microfinance loans were disbursed through the J.P. Laurel Rural Bank and Rizal Micro Bank, the renamed Merchants Bank.

Since the start of its microfi-nance business, RCBC said, more than 2,600 loans have been disbursed to 705 microentrepreneurs.

Outstanding loans stand at 19.759 million.

“These disbursements emanated from lending offices in Laguna province (Calamba, Cabuyao), Batangas province (Tanauan City, Rosario, Lemery, Bauan, Nasugbu, Laurel), Occidental Mindoro province (San Jose City) and South Cotabato province (Koronadal City),” the bank said.

RCBC said it is planning to extend its microfinance business to Davao City as well as in Candelaria in the province of Quezon before yearend.

The loans, averaging P39,000 each, have a tenors of three to six months. They were coursed through the PITAKA or Pautang Para sa Maliit na Industriya, Tindera at Agrikultura sa Kanayunan facility.

Microentrepreneurs engaged in retail (sari-sari stores) made up the bulk of the borrowers, accounting for 23%.

Market vendors make up 20% while those in personal service businesses such as beauty parlors, repair shops accounted for 14%.

Eateries or bakeries accounted for 14%, light and manufacturing made up 1% while other allied businesses such as cellphone loading stations, direct-selling, auto-supply, flower shop and beauty products accounted for 28%.

As of the first-half, RCBC’s net income reached P469 million, 8% up from the same period last year.

Shares closed weaker by 50 centavos to P28.50 apiece yesterday.