A vendor sits in a stall selling products in sachet packaging at a public market in Manila, Philippines, Aug. 1, 2019. — REUTERS

Bank of the Philippine Islands (BPI) announced on Wednesday a partnership with FundSpace, an online lending platform owned and operated by 917 Ventures, to boost financing for small businesses.

The partnership will allow FundSpace to act as a loan originator for the Ayala-led bank’s Ka-Negosyo loan, the bank said in an e-mailed statement. 

“This partnership underscores our commitment to providing madali (easy), magaan (convenient), and mabilis (fast) solutions to support small and medium-sized enterprises (SMEs) in realizing their growth plans,” Dominique R. Ocliasa, senior vice president and head of Business Banking said.

“We are grateful for this opportunity to collaborate with FundSpace and leverage its user-friendly online portal to make our suite of affordable loan products more accessible to SMEs in need of funding,” he added. “This partnership allows us to deliver an improved customer experience and empower SMEs to scale their businesses.” 

Through the FundSpace website, SMEs can apply for a range of Ka-Negosyo Loans, including Ka-Negosyo SME Loans, Ka-Negosyo Ready Loan, and Ka-Negosyo Credit Line.

The financial solutions offered by BPI in FundSpace are also available in BPI’s SME digital platform Ka-Negosyo On The Go, which was launched in June earlier this year.

Meanwhile, the Ka-Negosyo Credit Line, the Ka-Negosyo Ready Loan, and the Ka-Negosyo SME Loan were introduced in September 2022.

The Ka-Negosyo Credit Line is a financing tool for recurring expenses which can be used at any time through a standby checkbook.

Meanwhile, the Ka-Negosyo Ready Loan is intended for seasonal working capital requirements with a shorter repayment period to cater to cyclical funding needs.

The Ka-Negosyo SME Loan is meant for businesses that need to make big purchases for product expansion, equipment, and others. The borrower can pay on a monthly basis and can be stretched for longer terms. There is also an option to take out the loan with or without a collateral.

Earlier this year, BPI raised P20.3 billion from the issuance of peso fixed-rate bonds, the proceeds of which would be used to lend to small businesses.

Lending to MSMEs likewise continues to be pushed by the central bank, as banks are mandated by Republic Act No. 6977, or the Magna Carta for MSMEs, to allocate 10% of their credit portfolio for small businesses to boost the sector — 8% for micro and small enterprises and 2% for medium-sized enterprises.

Data from the Bangko Sentral ng Pilipinas showed that private lenders’ loans to MSMEs fell short of this quota in the first half of the year, reaching just 4.71% of their total loan portfolio.

Total loans to MSMEs from banks amounted to just P461.387 billion at end-June, versus banks’ total loan portfolio of P9.8 trillion. Aaron Michael C. Sy