The Rural Bankers Association of the Philippines (RBAP) and the French Development Agency (AFD) have signed a Grant Facility Agreement of 800,000 euros, approximately P47.9 million, to support the digital transformation of inclusive financial institutions, starting with rural banks.
In a statement, AFD said the grant will be used to finance technical assistance composed of training, capacity building, and communication and awareness-raising activities in order to support the digital transition of core-banking systems to the cloud, with a view to further develop the financial inclusion of underserved and unbanked populations in the country.
The technical assistance is provided within the framework of the global public policy reform of the financial inclusion sector in the Philippines and the implementation of the Inclusive Finance Development Program (IFDP). The AFD, alongside the Asian Development Bank (ADB), has been supporting this program since 2019 through a 100 million euro sovereign loan of the AFD to the Government of the Philippines.
The IFDP contributes to the overall objective of inclusive growth and sustainable development of the Republic of the Philippines by supporting the development of financial inclusion of the population, especially the poor and the rural population, through the consolidation of the institutional and regulatory environment and the improvement of financial infrastructures and the capacity building of financial services providers, supervisors, and regulators.
Over the past eighty years, AFD noted that rural banks in the Philippines have played significant roles in promoting inclusivity in markets underserved by traditional commercial banks. In order to remain competitive, rural banks must modernize and adapt from manual to digitized processes to increase efficiency, reduce costs, and better serve their markets.
Laurent Klein, AFD country director in the Philippines, said, “The AFD is very pleased of the partnership concluded today with the RBAP. With a wide range and diversity in size and activity levels, rural banks remain in a unique position to extend the reach of financial services in rural areas. In line with our organization’s strategic objectives to support financial systems and fight social and economic inequalities, this technical assistance will contribute to promote access to quality digital financial services for all, including the most vulnerable part of the population. This agreement also marks a major step forward in our collaboration with the ADB to support inclusive finance in the Philippines.”
French Ambassador Michèle Boccoz emphasized, “France is proud to support, through AFD, strategic reforms of the Government of the Philippines in digital transformation and inclusion in the financial sector to the benefit of the Filipino people. This is a further milestone in the bilateral relationship between our two countries. The Covid-19 pandemic is disrupting our societies and leads us to consider radical shifts in our usual modes of economic and social interactions. We believe that this program through the AFD and RBAP partnership will help pave the way to resilience and recovery especially of disadvantaged Filipinos in the rural areas.”
For its pat RBAP president Elizabeth Carlos-Timbol expressed the association’s gratitude for AFD’s continued support and trust.
“As the President for FY 2020-2021, one of my goals is to help rural banks especially the small ones to digitize and capacitate them through different programs. Through this partnership, this goal is finally realized. We look forward to working with AFD to create capacity building programs tailor-fitted to the needs of the rural banks for us to be able to compete at par excellence with the other financial institutions in the country,” said Carlos-Timbol.
At present, RBAP is composed of 412 rural banks with more than 2,500 branches mostly situated in the countryside and provides employment to 22,000 employees. Its commitment is to develop rural economies and to promote community enterprise development through good service and sound practices to drive financial inclusion for ALL.
Identified as the main channel of financial inclusion, RBAP is focused on uplifting its members through capacity building programs and partnership agreements with other institutions that advocates to strengthen the rural banking industry. As a major force in ushering economic development in the country with unique products such as microfinancing for rural sectors, particularly farmers, fisherfolk, and small enterprises, and savings programs to assist communities in building their financial security, we provide essential financial services to the most marginalized sectors of society.
Meanwhile, AFD implements France’s policy on international development and solidarity. Through its financing of NGOs and the public sector, as well as its research and publications, AFD supports and accelerates transitions towards a fairer, more resilient world. It also provides training in sustainable development (at AFD Campus) and other awareness-raising activities in France.
Credit belongs to : www.mb.com.ph