New Member Spotlight: Banco BHD

Monday 13th January 2014

GBA Newsletter

Banco BHDOur newest member in Latin America, Banco BHD, has a 15% share of the Dominican market, soon to reach 20% once its merger with Banco Leon is complete. Steven Puig, Executive Vice President and General Manager, spoke with the Global Banking Alliance for Women about his bank’s decision to join the Alliance, its hopes for the planned Women’s Market Program, and the role the bank can play in supporting women.GBA:  Why is having a program that targets women specifically a strategic priority for BHD?Steven Puig:  We’ve done a lot of work with women over the years considering that over half of our microfinance customers are women. One year ago we launched a credit card for women which was very successful. It provides benefits specifically targeted towards women, including health insurance that covers ovarian and breast cancer, roadside assistance in case of automobile break-downs, free basic home repair services, and discounts in certain retail stores. It also has the lowest interest rate on the market. When management saw its success there was widespread agreement that there is something important to having a gender focus and that we could do something across all products. We’ve recently launched a premium version for higher-income women. This version also includes airline miles, and that’s proven really successful also.That said, a few years ago we participated in a gender survey undertaken by the IFC, which is a shareholder. This brought to light a lot of the opportunities in terms of under-served markets including women-owned SMEs, to whom there is an estimated $300M credit gap in the Dominican Republic (DR).

GBA: What is BHD’s market position?

Steven Puig:   Our market share is currently 15%, and that will grow to 20% once the merger with Banco Leon is complete. We cover every segment of the business market from microfinance to SME to corporate, as well as consumer. We’re the fastest growing mortgage provider in the country with a 25% share of new mortgages created in 2013, and are part of a financial group with services as diverse as pensions, insurance and health care provision.

GBA: How did you first hear about the GBA?

Steven Puig:   We were conducting some research a few months ago and found out about the GBA and decided to apply. We were pleasantly surprised to find out that the IFC was one of your sponsors.

GBA: How would you describe the state of financial services for women in the Dominican Republic?

Steven Puig:   As the IFC study on Access to Finance for Women-owned SMEs indicated, there’s a $300 million credit gap for women-owned SMEs in the country. The average loan size is $80,000 for men-owned SMEs compared to $52,000 for women-owned SMEs. We don’t think that difference is fully accounted for by business size or type. There has been a lot of focus on microfinance for women and the microfinance banks have done very well, but to date we have not seen a broader approach from commercial banks, so we see a large opportunity there.

GBA: What are the main issues facing women SME owners?

Steven Puig:   We have good intuition about many issues faced by women SME owners and found the GBA’s 5-step approach very helpful. We’ll be conducting focus groups soon and are looking forward to the results.

The IFC shared some universal findings with us, which we anecdotally agree with: women require more information and education and may need a more targeted approach before they are able to make financial decisions.

GBA: How are you thinking about segmenting the Women’s Market?

Steven Puig:   Because we cover most segments we will focus our program on personal banking clients as well as business owners. The largest concentration of SMEs is obviously in the cities, so we will focus our business lending efforts there. We currently facilitate the largest number of conditional cash transfers (government to individuals) of any private bank in the country, supporting payments for education, utilities and pensions; and reach a large number of women through that, as women are often the beneficiaries of these transfers. We’re launching our own non-bank agent network called MiBanco, through which we aim to have 1,000 agents throughout the country. We see a gender dimension there also, as we will target women-owned businesses to operate as agents. We’re thinking of beauty salons, bakeries and of course the ubiquitous corner shops.

In terms of business segments, already half of our microfinance customers are women and we expect continued strong growth there. Moving up business size, we have to do better with segmenting businesses in consumer banking that are not incorporated entities. We know that a lot of these women would qualify for business loans but are currently using consumer products. We intend to develop a Value Proposition for ‘small’ as well as ‘medium’ sized women business owners. While our Corporate level women may not require the same type of support that owners of smaller businesses do, we intend to involve them as role models and perhaps mentors.

We also see a lot of opportunity in psychometric testing. We had assumed this methodology would help us in the micro market, but we are seeing that it will be very useful in reaching SMEs. We see that 40% of SME loans fall in a “grey” zone that requires subjective loan approval and psychometric analysis will help us to improve making loan decisions to all our clients, including women.

GBA: What other products are you developing that target low-income women?

Steven Puig:  We have done a lot of work on home mortgages, and in 2013 we started targeting low-income housing. BHD was actually originally set up as a construction lending bank so we have very deep roots in that area. Last year we set up the first low-income housing project in the country making use of our Group’s Fiduciary Agent, Fiduciaria BHD, an initiative that was recognized by President Danilo Medina at the project’s inauguration. The participation of a Fiduciary Agent provides low-income buyers additional assurance that a project will be adequately funded and completed. There is a big gender dimension to this as well as women tend to be the most focused on housing.

There’s also a great opportunity in remittances. The largest population of Dominicans outside of the country is in New York, and we’ve been up there marketing our low to mid-market mortgage product ($50K – $60K), which is a great market opportunity in this country. We think we can create savings programs tied to remittances that can support getting and paying back mortgages.

GBA: What kind of policies do you have in place regarding women as employees and leaders of the bank?

Steven Puig:   We have a number of initiatives geared towards women, and look forward to developing more. We are convinced that successfully implementing a Women’s Market program requires focusing on women internally. We are pleased to report that half of senior managers at the VP level and above, are women. After the merger, we will also look into expanding our internal infrastructure to support women.

GBA: What specifically are your hopes for your new membership in the Alliance?

Steven Puig:   We hope to learn from the experience of other members and to make better decisions as a result. And we look forward to being net contributors of knowledge to the Alliance.

With the upcoming merger we will become the fifth largest bank in Central America and the Caribbean and hope other members can learn from our experience. We are very committed to this initiative; in fact, senior management chose to continue working on this program even though we were going through the merger. We are already a first-mover in the market with our women’s credit card, so we want to continue building on that.

—As told to the Global Banking Alliance for Women


Value of deposits: US$ 1.7 B

Value of loans: US$ 1.7 B

# of ATMs: 357

# of full service branches: 94

# of employees: 3,146