BankO mobile savings banks on partnerships to be profitable by 2016

BPI Globe BanKO, the first mobile phone-based savings bank, is relying on partnerships that include retail stores, non-government organizations (NGOs) and local government units (LGUs) to achieve breakeven and be profitable by 2016.

 

The bank is basically in the investment phase, operating on a balance sheet in the red, since having been incorporated in 2012, president and CEO John Rubio told reporters in a briefing held in Makati City Thursday.

 

"We're investing heavily. It takes some funds to start up a business. We will become net positive. We built a five-year P&L (profit and loss statement) that we will be positive by 2016," he said.

 

By 2016, Rubio said they expect to rake in a net income of P100 million.

 

"All the drivers that underlies that five year P&L... we're hitting it all," he noted.

 

The bank plans to grow the number of account holders and expand its loan portfolio through partnerships with retail small-medium enterprises (SMEs), NGOs and LGUs.

 

"Our model is built not on branches, it's built around partner outlets. People transact with partner outlets which is a neighborhood drugstore... sari-sari store," Rubio said.

 

BanKO has five branches but are mostly used for operations. "The branches are not important, what's important are the partner outlets," Rubio said.

 

The bank screens possible partner outlets like sari-sari stores, drugstores and pawnshops, head of Acquisitions and Customer Service JM Aujero said.

 

To be a BanKO partner outlet, the business must have a funding or cash-on-hand of at least P15,000, he said.

 

BanKO aims to end the 2014 with 4,000 partner outlets, 1 million account holders and P500,000 to P800,000 retail loans portfolio, Rubio said.

 

Latest numbers from the bank show it has over 2,600 partner outlets nationwide, 650,000 account holders and P82 million worth of retail loans portfolio.

 

"We're currently heavy in Luzon. We're now expanding to Visayas and Mindanao by partnering," Rubio said.

 

"We're acquiring between 50,000 to 55,000 per month because of the partnerships we have and caravans going to public markets, schools talking about financial literacy," he said.

 

Expansion in Visayas started in the Typhoon Yolanda hit areas, Aujero noted.

 

Last May, BanKO and global humanitarian agency Mercy Corps have joined IDEO.org, the non-profit arm of design and innovation firm IDEO, to design financial products that will help survivors of Typhoon Yolanda find a more secure financial footing.

 

BanKO has also partnered with Simbahang Lingkod ng Bayan and the US Agency for International Development (USAID)-Scaling Innovations in Mobile Money (SIMM) Project to open outlets in Payatas, Quezon City. – VS, GMA News