Licking the PAR Problem

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Licking the PAR Problem

  1. 1. Cecile Tanael President, Rural Bank of Mabitac 2009 RBAP-MABS National Roundtable Conference May 12-13, 2009 Hyatt Hotel and Casino Manila
  2. 2. WHAT HELPED RB MABITAC REDUCE AND KEEP DELINQUENCY AT BAY
  3. 3. •  Incorporated in 1974. •  The pioneer in providing microfinance loan (individual approach) in the communities it serves. •  Network of 8 branches located in Laguna and Quezon provinces; •  Deposit base distributed among more than 17,500 small regular savings accounts.
  4. 4. No. of branches 8 Total assets PhP 353.0 M Bankwide Loan Portfolio PhP 222.0 M Deposits PhP 234.0 M Net Worth PhP 43.0 M Gross Income PhP 73.0 M Deposit to Loan Ratio 105%
  5. 5. (Amount in million pesos) ‘03 ’08 Growth No. of branches 8 8 0% No of Staff 20 82 310% Assets 182.0 353.0 94% Portfolio 123.0 222.0 80% Deposits 133.0 234.0 76% Net Worth 19.0 43.0 126% Gross Income 32.0 73.0 128%
  6. 6. •  Joined the MABS Program in 2003, a USAID funded program for microfinance capacity building. •  Developed and introduced a microfinance loan product, named KABALIKAT;
  7. 7. (2003 – December 2008)
  8. 8. (2003 – December 2008)
  9. 9. (2003 – December 2008)
  10. 10. As of December 2008 Active clients 6,370 Portfolio outstanding Php 41.0 million PARR > 7 Days 8.64% PARR > 30 Days 6.44% Cum. No. loans disbursed 36,118 Cum. Amount of loans disbursed Php 625.0 million Micro-Deposit balance Php 19.7 million
  11. 11. As of December 2008 •  40% of the bank’s clients are micro-borrowers; •  15% of the bank’s total loan portfolio is invested in microfinance.
  12. 12. •  RAPID EXPANSION •  NON COMPLIANCE TO P&P •  WEAK MONITORING SYSTEM •  INCIDENCES OF FRAUD •  OTHERS: CALAMITY/DISASTER
  13. 13. - Make use of available reports and tools a) PAR AGING b) Performance Per AO c) Performance Per Branch d) PAR Trending Analysis •  Implement actions based on the result of the analysis done.
  14. 14. - Ensure that best practices are followed. - Define steps on loan monitoring. - Define steps on loan analysis.
  15. 15. - Attended trainings conducted by MABS - Put in actions what we have learned •  Constant follow up on the proper implementation of new policies & procedures. - Conduct in-house trainings for MF staff.
  16. 16. - Appointed MF Program Manager and Area Supervisors to strengthen monitoring of branches.
  17. 17. •  Helps the MF team to monitor especially in the compliance with policies and procedures as written in the manual. •  Implemented internal audit policies to prevent FRAUD.
  18. 18. 1. SOUND CREDIT POLICIES CUSHIONED THE EFFECTS - good client selection - diversified loan products - conservatism in appraisals 2. BACK UP, BACK UP, BACK UP; 3. RESTRUCTURE, only when necessary 4. WRITING OFF hard accounts 5. FINANCIAL STABILITY – Best Preparation of All.

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