“Ibaan in Batangas, Philippines is a trading town where selling is a major source of livelihood. This is why we have a lot of peddlers here,” says Teresa M. Ganzon, managing director of Bangko Kabayan, Inc. (BK), which is based in the town. “Capital plays a big role in the selling business, and my father, being an entrepreneur, had clearly seen this.”
Indeed, this was why her father, Bienvenido M. Medrano, and her maternal grandfather, Manuel M. Agregado, established the Ibaan Rural Bank Inc. way back in 1957. The forerunner of the present-day Bangko Kabayan Inc., the Ibaan Rural Bank had made its objective to provide reasonably priced credit particularly to the community’s small merchants, farmers and traders.
In 1977, however, Bangko Kabayan went through a financial crisis that forced Ganzon and her husband Francis to get deeply involved in its operations. It took the couple almost nine years to turn the bank around. But then, in 1989, Ganzon’s father ultimately decided to sell his interest in the bank.
“At this point, my husband and I offered to buy out the rest of the family’s share in the bank,” Ganzon recalls. “Our offer was accepted and this gave us the freedom to pursue the vision that we had for Bangko Kabayan.”
That vision, then as now, is to make Bangko Kabayan a leading rural financial institution that foster’s God’s presence in the community” by efficiently delivering personalized financial services to the small and micro entrepreneurs in Batangas.
Ganzon explains, “As a rural bank, we have a social goal to spur development in the countryside. While some entrepreneurs aim only to achieve their business objective, we at Bangko Kabayan have made it a point to go further down to the rural areas that we are servicing. We have made it our main objective to serve the poor.”
This goal was inspired by the “Economy of Communion,” a project conceptualized by Chiara Lubich, the Italian founder of the Focolare Movement, an international religious organization of which the Ganzon couple are members. Through this project, Focolare challenges its entrepreneurs-members to carry out this vision by helping the poor until they can fend for themselves and are no longer in dire need.
The couple anchored Bangko Kabayan on this philosophy, designing its deposit products, loan products, and microfinance services to inculcate the value of savings and promote entrepreneurship among the poor.
An initial deposit of only one hundred pesos (PhP 100) is required to open a BK interest-earning savings account. To convert into a current account, the depositor simply needs to deposit an additional five thousand pesos (PhP 5,000). This current account is interest-bearing and can be monitored through a passbook. Time deposits in BK have a minimum term of 90 days, and require a minimum placement of ten thousand pesos (PhP 10,000).
Among Bangko Kabayan’s major microfinance offerings is the “Kabayan loan”, an individual lending program that caters to SMEs, providing them with working capital and facilitating their acquisition of fixed assets.
Another BK microfinance offering is the “Kapitan loan”, a group lending program for women in the rural areas. Aside from lending, this program facilitates seminars and discussions on credit management and discipline, business management, health care, leadership and values formation.
These microfinance programs began in 1996 when Bangko Kabayan established its social development foundation. Four years later, the bank offered them as regular bank products to a clientele that had by then grown to 500 borrowers. Form that tine onwards, this number has further grown to 8,000.
Today, BK has a total of 11 branches in Batangas – in Batangas City, Calaca, Cuenca, Ibaan, Lemery, Mabini, Nasugbu, Rosario, San Jose, San Juan, and San Pascual. With current resources totaling over PhP 1 billion, its services more than 50,000 clients.
For its rural banking performance, BK has received various awards – including five Eagle Awards from the Rural Banking Association of the Philippines for excellent performance in managing microfinance operations – and currently ranks among the top 3 percent of all rural banks in the Philippines.
Acknowledgement: Entrepreneur Bookazine, Philippines
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