Listed Bank of the Philippine Islands (BPI) said its microfinance arm has signed a memorandum of understanding with a World Bank (WB) Group member to seek potential to strengthen and extend the products and services it provides to self-employed micro-entrepreneurs (SEMEs).

BPI Direct BanKo will be supported by the WB’s International Finance Corp. (IFC) in the development of additional loan products, the digitalization of existing processes and services, and the development of additional credit scorecards, according to the Ayala-led bank on Monday.

The arrangement, BPI Direct BanKo President Jerome Minglana said, will assist the bank progress its digitalization and promote financial inclusion in the Philippines.

“We trust that the technical expertise and global experience of IFC will help BPI Direct BanKo develop and implement relevant products and services that will benefit Filipino SEMEs in the short term and in the long run,” he was quoted as saying.

BPI said micro-businesses account for 89 percent of companies and 30 percent of jobs in the local economy. However, due to factors such as a lack of financing choices and a significant reliance on local demand, they have been disproportionately affected by coronavirus disease 2019.

“The challenges in gaining access to credit for micro-entrepreneurs and in granting credit for lenders like BanKo have been further exacerbated by the pandemic,” Minglana noted.

SEMEs will be able to obtain easier access to a variety of products and services as a result of the initiatives, BPI mentioned, with the added benefit of new digitalized processes. This will be part of BPI Direct BanKo’s new loan growth strategy, which will be less reliant on the establishment of physical locations.

“With more than half of the Philippine’s micro, small and medium-sized enterprises led by women, the pandemic has emphasized the need to foster greater financial inclusion, particularly for those impacted businesses owned and led by women,” Jean-Marc Arbogast, IFC’s country manager for the Philippines, was also quoted as saying.