Housing Microfinanc: Addressing Home Improvements and Housing Needs


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Housing Microfinanc: Addressing Home Improvements and Housing Needs

  1. 1. Housing Microfinance, Addressing Home Improvements and Housing Needs Teresa Ganzon Bangko Kabayan 2010 RBAP-MABS National Roundtable Conference Hyatt Hotel and Casino, Manila June 2-3, 2010
  2. 2. GABAY Housing Loan Bangko Kabayan’s Housing Microfinance
  3. 3. Why 2005 MF Survey HMF? 1. Additional working capital ✔ 2. Education ✔ 3. Medical purposes ✔ 4. House repair & renovation 5. Addt’l capital for farming activities 6. Car
  4. 4. Why HMF?  Feasibility of product because of higher demand for home improvement  Additional loan product for Microfinance Clients (market penetration)  Increase in no. of accounts for Account Officers  Client retention (because GABAY is an incentive loan for existing clients)
  5. 5. Sample Flyer
  6. 6. Clients (As of March 2010)  Number of accounts: 267  Total Releases: P 5,496,000.00  Loan Portfolio: P 3,899,074.36  Ave. Loan Term: 10 months  Ave. Loan Amount: P 20,500.00
  7. 7. Type of Projects Kitchen Improvement 31 11.6% Wall Finishing and Painting 45 16.8% Ceiling and Roof Improvement 23 8.6% Bathroom Improvement 16 6% Improvement of doors and windows 20 7.5% Floor finishing and Improvement 14 5.2% Water and Electric Supply 17 6.3% Additional Capital for House Construction 13 4.9% Home Improvement/Renovation (addt’l rooms) 61 22.9% Fence Improvement 9 3.4% Apartment 2 0.75% Other related projects (poultry, piggery, store) 16 6% Total 267 100%
  8. 8. Developmental Stage STEP 1: Market Research was conducted through the support of MABS a) with two (2) days indoor and actual field training b) preparation of draft product manual c) FGD with BM’s, AO’s, Supervisors and selected respondents from the branch
  9. 9. Developmental Stage STEP 2: Training of Supervisors and Account Officers of Pilot Branches a) in-house training with AOs and Supervisors in- b) documentation and discussion of policies STEP 3: Manual Preparation and Approval STEP 4 : Inclusion of Housing Microfinance in Loans Program and General Ledger
  10. 10. Introductory Stage • Pilot test in two (2) branches • Zero availment on the first three (3) months of pilot testing o July is not a good month to start construction and repair of houses o AO hesitant to offer new product (new documentation requirement procedure for group lending)
  11. 11. Introductory Stage • One time orientation without follow through in process and procedure is ineffective for new products. • We pilot-tested HMF during the peak season for loan pilot- renewal of existing clients. • Bangko Kabayan was not able to roll-out HMF on the roll- 1st semester of 2009 and was delayed by six (6) months.
  12. 12. Introductory Stage Product roll-out was delayed because… roll- ..preparation & approval of Process and Procedure Manual took a lot of time ..our MF department focused more on strengthening existing loan products to achieve growth for 2009 ..there was quite a number of scheduled renewals from existing clients
  13. 13. Moving Forward • After the MABS roundtable on HMF, our Supervisors realized that HMF loans did not need to have large amounts and that simple house renovations could be accommodated. • Bangko Kabayan’s GABAY Housing Loan has shown remarkable growth since its pilot test (Sept. ’09) • As of April 2010, it has total releases of P5.5 M, a portfolio of P3.9 M with 232 accounts and 0.43% PAR.
  14. 14. BK HMF Loan Status Performance
  15. 15. Future Plans Continuous marketing of GABAY Housing Loan to all eligible MF clients Roll-out to regular depositors Roll- Maintain zero percent (0%) PAR through proper account management Continuous product innovation
  16. 16. Impact of HMF 1. Bank and Management  Additional product to offer for the clients  Good opportunity and competitive advantage  Additional loan portfolio
  17. 17. Impact of HMF 2. Account Officer  Additional portfolio that may be considered for incentive  Helps the account officer acquire new clients by offering good opportunities not only on their business but also in their status of living
  18. 18. Impact of HMF 3. Microfinance Clients  Availment of additional (incentive) loan with a lower interest rate and a longer term  Diversion of funds for their business can be avoided  Improve their status of living
  19. 19. Marigel Luz Loan Amount: P 15,000.00 Project: Improvement of Kitchen and Bath Room BEFORE AFTER
  20. 20. Marigel Luz Loan Amount: P 15,000.00 Project: Improvement of Kitchen and Bath Room BEFORE AFTER
  21. 21. Evangeline Banila Loan Amount: P 9,000.00 Project: Wall Painting BEFORE AFTER
  22. 22. Nenita Magtibay Loan Amount: P 20,000.00 Project: Partitions of 2 Bed Rooms and Wall Finishing BEFORE AFTER
  23. 23. Riza Capinding Loan Amount: P 9,000.00 Project: Repair of Ceiling and Wall Painting BEFORE AFTER
  24. 24. Mila Rosales Loan Amount: P 13,000.00 Project: Improvement of terrace precast and flooring BEFORE AFTER
  25. 25. Protacia Lorzano Loan Amount: P 50,000.00 Project: Kitchen Improvement (flooring, walls, sink, cabinet) BEFORE AFTER
  26. 26. Jasmin Lat Loan Amount: P 50,000.00 Project: Construction of Sari-sari store Sari- BEFORE AFTER
  27. 27. Edna Honrade Loan Amount: P 40,000.00 Project: Construction of Ground Floor and additional room BEFORE AFTER
  28. 28. Dulce Merano Loan Amount: P 15,000.00 Project: Fence Improvement and Water Tank BEFORE AFTER