Chamber eyes more ties with bankers-A A +A
Friday, February 22, 2013
THE Cebu Chamber of Commerce and Industry (CCCI) is planning to woo the Rural Bankers Association of the Philippines (RBAP)-Cebu to enlist as a sectoral member of the chamber, to make access to capital easier for micro-borrowers.
In an interview with reporters, CCCI president Prudencio Gesta on Thursday said the plan to invite RBAP-Cebu would not only boost the membership base of the chamber, but would help address the Cebu market vendors’ need for financial services.
“Banks are supportive of this sector,” said Gesta, also the first senior vice president of the Rizal Commercial Banking Corp. (RCBC) and RBG deputy group head for VisMin sales. “So the chamber would seek ways to bridge the gap between formal lenders and micro-enterprises.”
Gesta said the objective is to eliminate the “5-6” loan operations and other informal lending mechanism patronized mostly by micro-enterprises.
This is one of his priority projects in the chamber before his term ends this year.
Vendors who go through informal channels like 5-6 are slapped with a hefty 20 percent interest per month or 240 percent per year, higher than 12 to 24 percent interest per year that rural banks charge.
“The chamber will help in the coordination between the (Carbon) market vendors and members of the RBAP-Cebu,” he said, if RBAP becomes a member.
All borrowings will be endorsed by the Carbon market vendors’ association, which will screen the loan applications of their members before endorsing these to the rural banks.
Meanwhile, Gesta welcomed the move to allow foreign equity in rural banks.
The Senate recently amended a law that, for more than two decades, limited rural bank ownership to Filipinos. The bicameral committee decided to adopt Senate Bill 3282’s main provision to allow foreign individuals and entities to acquire equity of up to 60 percent in rural banks.
Sen. Sergio Osmeña III, chairman of the banks, financial institutions and currencies committee, believes there is a need for rural banks to look beyond their limited resources and take advantage of funds available elsewhere.
RBAP president Edward Leandro Garcia, in earlier interview, said this create an environment conducive to economic growth among rural banks and farmers and micro-entrepreneurs.
“Once this bill is signed into law, the whole RBAP will be keenly anticipating talks to intensify for potential foreign investor participation in the industry,” said RBAP vice president for Visayas Enrique Abellana of Rural Bank of Barili.
Published in the Sun.Star Cebu newspaper on February 23, 2013.