Empowering Rural Banks (First of Two Parts)

LAST month, the Rural Bankers of the Philippines–Microenterprise Access to Banking Services (RBAP–MABS) celebrated its 15th year anniversary.

The principal guests who attended the special anniversary dinner and awards night last June 7, 2012 included Leslie Basset, US Embassy Chargé d’Affaires; Richard Dreiman, president and chief executive officer of Chemonics International (the contracted implementer of the MABS project); Jonathan Simon, assistant vice president for ASIA Chemonics International; John Owens, chief of Party of USAid; Janet Lopoz, executive director of Mindanao Development Authority (MinDa); Teresita Espenilla of USAid; Corazon Miller, chairperson of the Rural Bankers Research & Development Foundation; Ian Eric Pama, outgoing RBAP President; and Edward Leandro Garcia, incoming RBAP President.

The occasion highlighted the numerous contributions of the MABS program in empowering rural banks to provide much needed financial services to the Philippine countryside. Success stories among participating banks and MSME borrowers were likewise recognized.

Let me explain first what MABS is. MABS is a USAid-funded program that aims to accelerate national economic transformation by providing training and technical assistance to participating rural banks. The objective is to enable rural banks to expand their menu of financial services especially designed for micro-enterprises, farmers and low-income households.

According to Pia Bernadette Roman Tayag, head of the Bangko Sentral ng Pilipinas (BSP) Finance Advocacy Staff, MABS has over 90 partner rural banks that have disbursed over three million loans amounting to billions of pesos through the years.

Since the start of the program, MABS partner banks have been able to provide viable microfinance services in the countryside, as well as pioneer various innovations in terms of product and service deliveries.

MABS partner banks are among the providers of housing microfinance, micro-agri loans and microinsurance. They also implement mobile phone banking for microfinance services.

The importance of this project, especially in the Philippine rural areas, cannot be overemphasized. After all, growth and prosperity in the countryside can be spurred by the development of local enterprises, especially micro, small and medium enterprises (MSMEs).

It must be noted that MSMEs play a major role in the country’s economy: approximately 99.6 percent of all our enterprises are MSMEs that employ 70 percent of our workforce.

Rural banks play a strategic role in this context. With over 2,500 offices, rural banks are in the best position to serve the needs of the countryside.

The strength of rural banks in accomplishing this aim does not rest on their geographical presence alone, but on their deep understanding of the character, peculiarities and needs of their clientele.

With the introduction of the MABS program, the rural banking industry has taken on the challenge of providing more innovative and inclusive financial services through microfinance.

Through its various training programs, MABS has enabled rural banks to further increase their capacity in delivering their products in a safe, sound and sustainable manner.

By facilitating the disbursement of more than P41 billion to micro-entrepreneurs through the years, the MABS program has touched the lives of nearly four (4) million Filipino families.

This, I believe, is not an easy feat. It has only been made possible with the committed cooperation of different parties, led by the USAid’s continuing vision and foresight in supporting this program for more than 15 years.

Such commitment demonstrates the kind of Public-Private Partnerships that our current administration would like to see—a sincere and credible effort for economic progress that is backed up by private sector resources and proper government oversight.

(To be concluded next week)

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