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Surviving Microfinance in These Trying Times

Surviving Microfinance in These Trying Times. Atty. Nicolas J. Lim President/CEO,1 st Valley Bank, Inc. 2009 RBAP-MABS National Roundtable Conference May 12-13, 2009 Hyatt Hotel and Casino Manila. 1 st Valley Bank, Inc. Established in 1956

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Surviving Microfinance in These Trying Times

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  1. Surviving Microfinance in These Trying Times Atty. Nicolas J. Lim President/CEO,1st Valley Bank, Inc. 2009 RBAP-MABS National Roundtable Conference May 12-13, 2009 Hyatt Hotel and Casino Manila

  2. 1st Valley Bank, Inc. • Established in 1956 • Formerly known as Rural Bank of Kapatagan Valley, Inc. (RUBANKA) • The biggest in Northwestern Mindanao. • Rated A+(rb) by the PhilRatings system. • Hall of Fame Awardee, Most Outstanding RB, National Level by Land Bank of the Philippines • 80% of the branches are in the rural areas.

  3. Branch Offices

  4. MF Programs with MABS • FAME (Financial Assistance to Micro-Entrepreneurs) • Introduced in July 1999 • MAP (Micro-Agri Loan Product) • Started in 2004. • Mobile banking technology- sinceJuly 2006 • (TextAPayment; TextADeposit; TextASalary)

  5. Microfinance Operations(as of Dec 2008) No. of Branches 19 No. of Account Specialists 26 No. of Borrowers 4,387 Loan Portfolio Balance P47.74 M Cum. No. of Clients Served 10,920 Cum. No. Loans Disbursed since 1999 49,676 Cum. Amount of Loans Disbursed P782.78 M No. of micro-deposit accounts 89,109 Total amount of micro-deposits P105.69M Portfolio-at-Risk Rate, 30 days (PARR30) 2.75%

  6. Selected Bankwide Indicators

  7. External Challenges to our Operations

  8. Legacy Issue:

  9. Global Financial Crisis:

  10. 1VB STRATEGIES • Robust Organizational Structure • Generalist vs Specialist • Increase the number of training focusing on Operational Efficiency • Realign Targets

  11. Other Initiatives • Review Priority Programs • Regularly Monitor Controllable Expenses • Intensify recovery of foreclosed assets and other collectibles • Widen sourcing of credit lines • Prepare Notes for Rediscounting • And Training…Training… Training… and a lot more to be done

  12. It’s Time to Go Back to Basics: • Zero Tolerance to delinquency • Start small loans, step up • Shorter terms for fast recovery of funds • Small frequent amortization payments • Focus on character and cash flow rather than collateral • Strict adherence to policies and standards • Take care of your staff, they are your business centers

  13. Microfinance Best Practices is still the best weapon we have. Stick to them

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