Since MSMEs account for 99.5 percent of all businesses in the nation, Union Bank of the Philippines has announced recently that it plans to increase the amount of loans that it disburses to the sector by a substantial 30 percent in the coming year.
At a recent media roundtable event, UnionBank’s head of business banking Jaypee Soliman informed reporters that the Aboitiz-led bank expects its loan book for MSMEs to soar to P16 billion this year from roughly P9 billion to P10 billion last year.
UnionBank intends to power up one million MSMEs in 2024
According to Soliman, the bank has given over P14 billion to MSMEs across the nation to date.
“I want to reach and finish at P16 billion this year, and by 2024, I want to grow by at least 30 percent,” he stated.
He emphasized that this number still excludes unofficial MSMEs that take out personal account loans.
Soliman estimates that the sector repays between 90 to 92 percent.
The UnionBank executive also said they want to increase their MSME clientele from the present 130,000 to one million by 2030.
Meeting the needs of small businesses
According to Dino Velasco, UnionBank’s institutional marketing division head, the bank has developed the “UB Negosyante,” a new MSME Business Banking app, to meet the needs of small businesses.
With the new business app, Velasco said that UnionBank wants to encourage micro, small, and medium-sized businesses (MSMEs) and support their expansion through the Power to Grow initiative.
He also wants MSMEs to know that the bank (UnionBank) is a traveling companion.
“Thanks to the campaign, over 100,000 new MSMEs are now banked, which also increased app usage,” he reported.
In addition to this, the app was also able to produce 2,000 UPay users, 500,000 bill payments, 50,000 mobile check deposits, and over 13 million financial transfers.
After adding more than two million new consumers annually starting in 2019, UnionBank’s client base has since grown to almost 13 million.
From January to September of this year, the bank’s loan book increased by 18% to P530.99 billion from P479.63 billion in the previous year, while its deposit base somewhat increased by 6% to P724.7 billion from P711.3 billion.