Rizal Commercial Banking Corp. (RCBC) secured a P2 billion loan from the Social Security System (SSS) to expand its lending business to small and medium enterprises (SME).

“RCBC shares the pension fund’s aim to stimulate economic growth through financial assistance that results in more employment opportunities,” Business World reported Michael O. De Jesus, RCBC EVP and Head of the National Corporate Banking Group, as saying.

“The SSS funding is intended to further spur the bank’s lending activities to the commercial or middle markets and small entrepreneurs as well as for the expansion of educational, health care and social empowerment facilities,” De Jesus said.

The bank said the loan may be used to acquire equipment, upgrade facilities and to get additional working capital for businesses such as those in food processing, manufacturing, agribusiness, trading business, commercial production, and other service-oriented facilities including schools, hospitals and other vital social institutions.

The average loan volumes of corporate, consumer and small and medium enterprises (SMEs) at RCBC increased in the first quarter by 15 percent, 18 percent and 13 percent, respectively. The bank’s lending business interest income accounts for 81 percent of its total interest income.

The SSS funding will also enable RCBC to surpass its P302 billion first quarter loan portfolio, which is 12 percent higher from the level in 2015.

The bank had said it is trying to expand loans to SMEs by promoting the use of its digital channels which include cash management facility, enterprise banking, and online portals.

“RCBC’s rapid deployment of SME lending centers shows its commitment to boost its loan portfolio in the SME market,” the bank said.

RCBC has 13 lending centers with 14 lending satellite offices nationwide. It also has a Commercial and SME Banking Segment and Retail Banking Group which includes a special team of account officers to handle it.

“It is our duty at RCBC to contribute to the country’s social development goals and nurture the growth of business particularly among SMEs, which make up 99% of registered businesses in the country,” De Jesus added.

As of end-March, the bank has 475 consolidated network nationwide as well as 405 automated teller machines.

What do you think of RCBC's P2 billion loan from SSS for its SME lending business expansion? Let us know in the comments section below.