BPI Globe Banko: Reshaping the Philippines Rural Banking System

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BPI Globe Banko: Reshaping the Philippines Rural Banking System

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Publication Date:
April 21, 2015

Industry:
Financial Services

Source:
Singapore Management University

This case is set in December 2014, and discusses the business model and challenges facing BPI Globe BanKO (“BanKO”). Established in 2009, BanKO is the Philippine’s first mobile phone-based, microfinance-focused savings bank. At that time, statistics showed that eight out of ten Filipinos did not have access to a bank. A few informal moneylenders provided some 40% of small-scale business lending in the market, at interest rates that could touch around 240% per annum. The population living in 40% of the Philippines’ municipalities did not have easy access to a physical bank branch. BanKO intends to address these issues by leveraging its combined assets in banking and telecommunications through a partnership between the Bank of the Philippines Island (BPI), the oldest operating bank in Southeast Asia; Globe Telecom, a leading telecommunications company; and the Ayala Corporation, one of the largest conglomerates in the Philippines. BanKO aims to provide the delivery of a range of banking services through mobile solutions supported by a network of partner outlets. These outlets are existing establishments in the community, such as pawnshops and grocery retailers, which have been selected, trained and accredited to conduct customer identification for new account applications, and perform cash-in and cash-out transactions. They are the critical link to bringing financial services to communities located even in remote locations. BanKO also offers loans to microfinance institutions, including rural banks and cooperatives. As it expanded its product range and customer base, BanKO began to extend its ecosystem to involve a range of other partners including fast moving consumer group (FMCG) companies such as Nestle, Proctor & Gamble and Unilever, “sari-sari” stores, social media providers such as Facebook, local governments, cooperatives and aid agencies.

While BanKO’s performance has been encouraging, the team has yet to firmly establish that its platform and business model are indeed viable and sustainable over the long-term. In addition, it needs to be ascertained how the business could be further expanded, while ensuring that the ecosystem does not become too unwieldy to manage.

Copyright © 2021 Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School.

BPI Globe Banko: Reshaping the Philippines Rural Banking System

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