Bank of the Philippine Islands (BPI) and Globe Telecom are set to launch a mobile microfinance institution after clearing a regulatory hurdle.
The country's central bank has approved a proposal that will see BPI transfer 40% of the shares in its Pilipinas Savings Bank (PSBI) to Globe Telecom and another 20% to Ayala Corporation.
PSBI will be transformed into a bank dedicated to providing wholesale loans to microfinance institutions in the country and will have initial capital of 500 million pesos ($10.8 million).
It will rely heavily on mobile technology to deliver and collect loans in rural areas. Globe, already works with a number of rural banks and microfinance institutions which use the telco's G-Cash product, an SMS-based system for money transfers and loan collection.
The firms are now waiting for the central bank to give the green light for a name change and an electronic banking licence ahead of a proposed launch next year.