BanKO, THE FIRST FULLY MOBILE SAVINGS BANK, CAN MAKE COOPERATIVES RUN FOR THEIR MONEY

What do you get when you cross a BANK and a cooperative/microfinance institution?  

You get a savings bank like "BanKO", the first fully mobile savings bank in the country.



Time was when a bank only accepts deposits from the public, mostly small people; and lends only to big business who has the required loan security/collateral.  

Then, small depositors are just that - savers.  And banks value them as cheap source of funds for lending to big business.  Micro, small and even medium-scale businesses could hardly borrow from banks, if ever.


It was to cater to the borrowing needs of  this big number of small savers, small businesses that usurers, 5-6 operators; and later the microfinance institutions (cooperatives, foundations and non-government organizations) came about.

But why are banks now going into the realm of microsavings, microfinance and microinsurance?

One, microfinance institutions, particularly foundations, non-government organizations, and to certain extent, cooperatives, have shown that this 'grey' area of  banking-like activities can be, and is profitable.

The Bangko Sentral ng Pilipinas (BSP) has adopted it as a policy to encourage microfinance among banks.  It has issued Circular 272, issued January 30, 2001 to govern the participation of banks in microfinance.


And another reason is that commercial banks/universal banks are now required by law to lend as much as 25% of their loan portfolio to small farmers, fisherfolk, etc.


The Rural Bankers Association of the Philippines (RBAP) reported that "microlending has become mainstream, with 287 of RBAP members said to be microfinance-engaged and six more as microfinance-oriented banks."


Now, back to "BanKO", which was launched nationwide recently.  With only P100, anyone can open a savings account with BanKO.  As an additional sweetener, it gives depositors a 1% annual interest with FREE INSURANCE.


BanKO's advertisements say that "as long as their (depositors')  daily balance is at least P2,000 for the past 6 months, the FREE insurance coverage is five times the depositor's average daily balance (ADB).  


This means that an ADB of P5,000 gives depositors an insurance coverage of P25,000.


A take-off from the deposit-based lending scheme started by cooperatives and other microfinance institutions, a low-interest loan is also given to BanKO account holders.  


This can be as much as two times the account balance.  "That means no more loans from informal loan institutions that charge unreasonably high interest rates," says the BanKO advertisement.


Another upcoming BanKO service is the PaniguroKO, a microinsurance product that gives clients P50,000 coverage for accidental death; P5,000 assistance in case of fire; P2,500 assistance in case of flood, typhoon and earthquake, a coverage period of one year, and a low subscription fee of just P365.


Moreover, BanKO is accrediting partners.  Already,  pawnshop giant Tambunting; and Generika Drug Store chain were registered as BanKO partners.


I even saw in the list a cooperative in Cavite (Cavite Farmers Marketing Cooperative).  If your institution wishes to become a BanKO partner, call (02) 754-9980, or e-mail info@banko.com.ph, or visit www.banko.com.ph


BanKO's head office is at:  BPI Globe BanKO Head office, 4th floor, BanKO Center, Ortigas Avenue, North Greenhills, San Juan, Metro Manila.


Indeed, BanKO, like other other microfinance-oriented banks (savings, rural banks, etc.) can become a stiff competition to cooperatives and microfinance institutions.  So, watch out for these institutions in your area.

COOPERATIVES particularly, should adapt to these changes in the environment, if they are to continue to survive and be relevant.


So there.  (END).