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BPI: Helping MSMEs navigate the challenging road to recovery

While the world prepares for widespread vaccination programs to fast-track the return to normalcy, the MSME sector (micro, small, and medium-sized enterprises) continues to struggle with sharp drops in demand and revenue.

According to the Asian Development Bank (ADB), MSMEs, which play a vital role in creating jobs for Filipinos, have experienced an unprecedented decline in their businesses over the past couple of months because of the continuous implementation of varying community quarantine measures.

With this, according to ADB, a prolonged pandemic requires governments to consider an optimal approach that neither impedes national revenues nor increases the budgetary burden in the fight against COVID-19. For MSMEs, this prolonged agony makes them worry about loan repayments and tax payments.

For its part, the Bank of the Philippine Islands (BPI) — the country’s pioneering bank which has survived economic upheavals, natural disasters, and even a pandemic in its 169-year history—has taken the necessary steps to support hard-hit firms to help them bounce back.

BPI, through its Business Banking unit, is among the first banks to respond to the needs of small and medium businesses and help them pivot towards resilience and growth.

The Bank offered flexible business loan solutions designed to help owners sustain their businesses during these challenging times. While many are probably hesitant to avail of loans given the uncertain economic environment, some have considered this as part of resiliency planning, one that helps organizations adjust and cope with the needs of the market.

In this respect, BPI Business Banking has also rolled out the Price Break program to extend support to qualified SME clients by offering discounted interest rates for their loans.

SMEs with small business credit and have SBC loans with rates above 8.0 percent per annum took advantage of the exclusive offer which lasted until December 2020. For its reprieve program, BPI extended a loan payment deferral for qualified clients for 90 days.

BPI’s Business Banking has also partnered with bancassurance firm BPI-Philam to provide free COVID-19 life insurance coverage worth P200, 000 for its clients and their employees for 90 days.

Digital banking

BPI’s Business Banking also helped businesses innovate and cope with the changes in consumer behavior brought about by COVID-19, enhancing its cash management platform and other customer-centric functionalities, and loading in-app e-wallets and website-integrated payment systems.

The bank has been giving many business clients a secure integrated payment system for their apps and websites to boost their branding and customer experience.

This is in addition to BizLink, BPI’s online corporate platform, which provides companies with a one-stop shop for digital collections, account management, and disbursements.

BPI has also ensured that withdrawing and depositing are convenient at this time through its 3,000 ATMs and CAMs available in major locations nationwide.

Microfinance clients

BPI Direct BanKo, the microfinance arm of BPI, also offered its mobile banking app for its microfinance clients to urge its customers to go digital in this time of COVID-19.

Through BanKo Mobile, NegosyoKo borrowers may easily view the schedule of their repayments, check their balance and payment history, and even pay their loans without having to leave their home or store, which is very convenient given the current restrictions and difficulty in transportation.

Even in these trying times, BanKo loans associates called BanKoPares and BanKoMares continue to check their clients’ situation and advise them on ways  to sustain their businesses. 

Since introducing NegosyoKo Loan to the market in 2016, BanKo has already served over 120,000 clients nationwide and released over PHP 12 billion in loans.

Innovative webinars

BPI also launched a series of free innovative webinars to help SMEs adjust to the new normal. Its webinar series highlights economic and industry analysis from its in-house economists and analysts; the benefits of technology in boosting organizational efficiency; and new normal practices that SMEs can integrate with their business model.

BPI also provides ideas and tips for improving business operations and tapping opportunities – collating articles, research reports, and other troves of useful knowledge from credible publicly available information and proprietary sources.

BPI cares

Sustaining its position as a pioneer, BPI also launched the country’s first peso-denominated bonds to be issued as a direct response to the COVID-19 pandemic. They were called BPI CARE Bonds (COVID Action Response Bonds).

BPI issued the CARE Bonds to address the financing needs of MSMEs as they work to overcome the challenges brought about by COVID-19. BPI has exceeded initial target and raised ₱21.5 billion, more than seven (7) times the initial planned issue size of ₱3 billion.

The amount raised added to BPI’s capability to provide financing to this very important segment of the economy. The proceeds of the CARE Bonds have been allocated for the purpose of financing and refinancing eligible MSMEs under BPI’s Sustainable Funding Framework.

Sustained risk management

Consistent with the Philippine central bank’s sustainable finance framework, BPI has also elevated its sustainability agenda by extending its project evaluation criteria surrounding Environmental, Social, and Governance (ESG) to MSMEs. 

The Bank will bolster loan offering programs for MSMEs to facilitate greater productivity, higher employment, and reduced poverty for the sustainable growth of the sector.

This focus on sustainability has come into focus with the recent issuance of Bangko Sentral ng Pilipinas (BSP) Circular 1085. Under the central bank’s guidelines, all banks are required to integrate sustainability principles, including those covering environmental and social risk areas in their corporate governance framework, risk management systems, and strategic objectives suitable for their size, risk profile, and consistency of operation.

BPI hopes that, with this, the sector will see the urgent need to improve sustainability risk consciousness to come up with better business continuity plans, in light of the new risks, such as the COVID-19 pandemic, that have become more likely in the future.

These are all part of the Bank’s commitment to the MSME sector. BPI is ready to provide sustainable solutions and innovations that empower MSMEs to rise up and recover from this difficult period. As their partner, BPI hopes to continue being a lifeline for its customers, a bank that responds to their needs, whatever the situation may be.

Topics: vaccination programs , MSME sector , Asian Development Bank
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