Although poverty rates in the Philippines have gradually been declining over the past decade, 37.8 million Filipinos still live on less than $2 a day, according to the World Bank. Many poor entrepreneurs – especially those living in rural areas – lack access to formal financial services. The geographic composition of the Philippines, which is made up of thousands of islands, makes it difficult and costly for banks to reach residents across the country. The rural banking infrastructure is fragmented, composed of many provincial banks that often lack scale and product diversification. Seeking to address these challenges, we helped launch Bridge Philippines, a holding operating company dedicated to investing and building capacity of financial institutions that focus on serving rural residents.
Bridge will establish a network of innovative, dynamic, mission-driven provincial banks located in rural Philippines. Bridge’s aim is to create jobs and opportunity by extending high-quality financial services to businesses, farmers and individuals in areas currently poorly served.
In early 2013, Accion and four other partners—Bamboo Finance, DEG (Deutsche Investitions- und Entwicklungsgesellschaft), FMO and social entrepreneur Paul Kocourek—launched the Bridge Fund, a U.S. $24.2 million fund dedicated to building Filipino banks in provincial areas. Bridge will make equity investments into successful Filipino banks serving lower income populations and micro and small businesses, and also provide these banks a range of capability building services to help them grow faster and serve more people. Accion will provide both funding as well as management services and technical assistance to Bridge and its investee banks.