GM

Bank of Luzon, Inc. – 2013

www.gmbank.com (check the true website)

Despite the enabling policy and regulatory environment, the trends of

commercialization and the positive developments in the microfinance industry, there are some

key challenges that still need to be addressed. The most obvious challenge is that although the

microfinance institutions are reaching a significant number of 1.3 to 1.5 million families, there

still remains a large unmet demand for microfinance services. In a recent country profile on

microfinance by the Microfinance Council of the Philippines, there are still approximately 2.9

million families that are unserved by microfinance institutions in the Philippines. This figure was

confirmed by a recent Asian Development Bank study where they indicated that more than

two-thirds of poor households, or 17 million people, still do not have access to microfinance

services. Instead, the poor rely heavily on self-finance or informal sources that may be very

costly, limiting their ability to participate in and benefit from development opportunities and

income-generating activities. Another challenge is the need to lower the cost of delivering

microfinance services to clients. Although microfinance institutions have already proven to be a

better alternative to informal moneylenders, better known in the Philippines as 5-6iv operators,

there is still room to improve operations and lower costs. The latest Microfinance Council of the

Philippines Performance Monitoring Report showed that 21 leading microfinance institutions

posted an average operating expense ratio of 38.8%, which is a key indicator of efficiency. This

figure may simply mean that it costs 38.8 cents per peso loan lent. The recently approved
Uniform Set of Performance Standards for All Types of Microfinance Institutions indicates that

the ideal standard for this indicator is 20% or less. This shows that efficiency of microfinance

institutions could be further improved.

A recent Economist Survey stated that although competition will help to reduce costs,

the biggest hope comes from new technology. This also seems to be a possible solution to

further increasing the reach of microfinance services.

Source: http://www.bwtp.org/pdfs/arcm/Jimenez.pdf

History

The GM Bank of Luzon, Inc. is founded through the merging of two banking institutions;

the Muñoz Rural Bank, Inc. (MRBI) and the Community Rural Bank of Guimba, Inc. (CRBGI). The

Muñoz Rural Bank, Inc. began its operations in 1956 in Science City of Muñoz, Nueva Ecija while

the Community Rural Bank of Guimba Inc. is located at the Municipality of Guimba, Nueva Ecija.

CRBGI was granted the authority to operate by the Bangko Sentral ng Pilipinas (BSP) in

February 2, 1987. These two companies merged on October 2004. The company later acquired

the Small and Medium Enterprises Bank (SMEs) in 2008.

Internal Issues

Organizational Structure

EXHIBIT 1 GM Bank Organizational Structure (By branch)



Vision & Mission

COMPANY MISSION

1. To reach the rural areas of the region where delivery of credit facilities is difficult.

2. To stay side by side with farmers and rural folks who cannot obtain financial services

from commercial banks, and

3. To remain as able partner in the agro-industrial growth of the far-flung areas of the

region.

Its mission compels to reach the rural areas of the region where delivery of credit

facilities is difficult; to stay side by side with farmers and rural folks who cannot obtain financial

services from commercial banks; and to remain as an able partner in the agro-industrial growth

of the far-flung areas of the region.

COMPANY VISION

“GM bank Inc. envisions the region where economic resources are enjoyed by the wealthy few

but also by the poor sector of the community.”

The company provides services for both rich and poor individuals. They offer loan

options to address to every need of a client. They have 45 branches in Luzon and 19 of them are

in Nueva Ecija. They provided accessibility in areas where the most of their clients reside. The

bank also envisions to maximize its resources in order to satisfy the known needs and wants of

any clients regardless of its financial capability.

Recent Accomplishments

GM Bank of Luzon Inc., as a newly consolidated rural bank based in Nueva Ecija, is still in

the expansion mode and it is raising P40 million worth of tier 1 capital for expanding. In 2009, it

raised P75 million. At the close of 2010, BSP and the Securities and Exchange Commission (SEC)

gave then GM Bank, Inc. the nod to consolidate with Bangko Luzon to form GM Bank of Luzon,

Inc. (GMB). The consolidation process resulted in a larger rural bank with a combined branch

network of 35, among the largest in Region III.

With its head office in Cabanatuan City, GM Bank currently has branches in other areas

of Nueva Ecija, Bulacan, Tarlac, Pangasinan, and Pampanga. It also has an affiliate bank, the

Bangko Luzon, Inc., based in San Isidro, Nueva Ecija; with branches at Cabanatuan, Cabiao, San

Antonio, Sta. Rosa, and Gapan. The branches of GMB totaled to 41 branches, 19 of which are
located all over Nueva Ecija. Effective on December 1, 2010, the banking activities and

transactions of GM Bank, Inc. and Bangko Luzon, Inc. have been consolidated under the

corporate name GM Bank of Luzon, Inc.