Microfinance Expansion Anchored on Service

Since MABS implemented the EAGLE Assessment System[9] in 2003, Bangko Kabayan has achieved an AA rating seven times, making it one of the most successful of MABS’ participating banks. Although Bangko Kabayan focused on overall targets set in the MABS EAGLE Assessment, Teresa Ganzon, the bank’s managing director, also credits the bank’s success to listening to its market, openness to innovation, and an all-encompassing adherence to its mission and vision.

“From MABS, we learned the value of conducting focus group discussions regularly to really understand what the clients want. We do not limit this to microloan clients, but include all our deposit and loan clients as well. We learned the art of listening and developing products according to the needs of the clients. A very methodical way of conducting market research (under the MABS Approach) was very helpful for us.” said Ms. Ganzon.

Guided by client feedback, Bangko Kabayan modified its products and policies. It was among the first to decentralize loan approvals for small loan amounts, flexibly grow and expand loan sizes to meet client needs, and introduce new products, including the MABS-developed housing microfinance loan. The bank also set clear standards and guidelines for staff — screening job applicants, ensuring that training modules are relevant and up to date, introducing incentives scheme to boost productivity, and using tools to monitor employee performance.

As a result, the bank continues to increase its client base and expand its branch network, while maintaining its portfolio quality. Since 2001, Bangko Kabayan has disbursed more than 149,000 microloans worth more than 2.8 billion PHP to more than 30,000 borrowers through its individual loan product Kaakibat ng Bangko sa Pag-unlad ng Kabuhayan, or KABAYAN loan, and group loan product Kapisanan ng mga Ilaw ng Tahanan, or KAPITAN loan. It also ranks among the top 3 percent of Filipino rural banks, with more than 1.8 billion PHP in assets.

Based on the success of Bangko Kabayan’s microfinance services, President Atty. Francis Ganzon said “…microfinance has become our mainstream product and we will bring it wherever we go.”[10]


[9] The EAGLE Assessment System is a performance assessment tool developed by MABS. Banks’ microfinance operations are assessed using five main indicators: E – efficiency, A – asset quality, G – growth, L – liability structure, and E – earnings.

[10] To view a video on the bank, see Bangko Kabayan 2012 EAGLE video in the attached DVD or online at: http://www.youtube.com/watch?v=cweO5xtxvJU

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