Following the approval of a new legislation that allows foreign investment into rural banks, Bridge, a financial services company committed to social impact in the Philippines, announced today that it is launching with a $24 million investment from Accion, Bamboo Finance, DEG, FMO, and Bridge’s founding principal and chairman, Paul Kocourek.
Bridge will provide capacity building services and capital to rural and thrift banks focused on low income populations and small businesses. It expects to make the first investment in June 2013 and invest all $24 million within two years.
“The opportunity and need in provincial areas of the Philippines is enormous. Rural finance is the missing component of inclusive banking,” said Paul Kocourek, who was formerly the managing partner of Booz & Co.’s Asia Pacific and Booz & Co.’s Global Financial Services practices.
“82% of provincial Filipinos do not have bank accounts; only 6% of business growth in small provincial businesses is funded by bank loans. This lack of access to finance means slower job creation, greater risk for the poor and increasing inequality,” he added. ”Bridge will help remove this barrier to development and accelerate growth.”
“Provincial banks are often owned by the same family groups for generations and are the only formal institution offering financial services to their local community. We have already identified many effective banks that wish to expand their products and reach but lack the funds and skills to grow,” said Gus Poston, Bridge’s second founding principal.
“Bridge will offer a combination of services and capital to support these banks, providing support in product design, risk management, growth planning, etc. These services will be provided by a team of Filipino and international experts working with the banks every day. Our vision is to build a long-term network of dynamic and dedicated provincial focused banks,” Poston added.
This initiative was made possible by the amendment of the Rural Banking Act.
In addition to Kocourek, Bridge’s investors are Accion, a global nonprofit dedicated to building a financially inclusive world; FMO, the Dutch development bank; DEG, one of the largest European development finance institutions based in Germany; and Bamboo Finance, a global private equity firm with expertise in microfinance and impact investing. Sharing the goal of creating enduring social and environmental impact and strong returns, these investors will provide funding as well as management services and technical assistance to Bridge and its investee banks.
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