BPI to offer no-collateral loans

Published May 26, 2021, 4:14 PM

by Madelaine B. Miraflor

In a bid to entice more borrowers from the agriculture sector, Bank of the Philippines (BPI) has opened a loan program to small and medium enterprises (SME) with no collateral and fewer documentary requirements.

BPI Business Banking Head Eric Luchangco said in a statement that the Ayala-led bank is looking to increase its presence in the area of agricultural enterprises, in recognition of agripreneurs as essential drivers to economic resilience and recovery.

“To reduce the hurdles of agripreneurs and to remain relevant to the Philippine economy, we had to increase our presence in this base,” said Luchangco.

“We are reaching out to show our interest to support the agricultural value chain including logistics, distribution, storage, and retail and wholesale trade,” he said.

Through this initiative, BPI is encouraging agripreneurs to use its targeted funding solutions to meet their financial requirements for working capital, successful trade, or plans for business expansion.

In particular, BPI wants agriprenuers to set up a business deposit account and take advantage of its online banking platform for easy transactions with their clients and suppliers given the mobility and quarantine restrictions.

The bank also aims to reduce the challenges in borrowing money by coming up with an SME term loan program, which requires fewer documents, with no collateral requirements, and faster turnaround time.

BPI is also working with organizations such as the Department of Agriculture-Agricultural Credit Policy Council (ACPC) and Globe myBusiness to introduce other opportunities and national programs for local enterprises.

Jocelyn Alma Badiola, executive director of ACPC, said the organization has designed innovative financing programs that respond to the needs of farmers and fisherfolk.

Some of these programs include SURE COVID-19, AgriNegosyo, Agripinay, and Kapital Access for Young Entrepreneur.

For her part, Sharon Frades, Core Product Marketing Manager for Globe myBusiness, has explained that agripreneurs can use Globe myBusiness products, such as its mobile postpaid plans, for their operations.

She shared how Globe myBusiness enables entrepreneurs with solutions that are meant to help their day-to-day operations and make their business future-ready.

Meanwhile, BPI also recently signed a memorandum of understanding with the Department of Trade and Industry to reach out to more entrepreneurs, help them bounce back, and further promote financial inclusion.

Under the Republic Act (RA) 10000 or Agri-Agra Reform Credit Act of 2009, banks like BPI are mandated to lend 25 percent of their funds to the agriculture sector.

Of which, 15 percent should go to agriculture, while the remaining 10 percent must go to agrarian reform beneficiaries (ARB).

A decade since the law took effect, the banking sector still fails to comply with such requirements.

Banks are known to rather pay billions in penalties than risk lending their money to small fishermen and farmers, who might not be able to pay them back.