Unsung heroes

It’s unfortunate that a few rotten eggs are getting in the way of these unsung heroes being given the accolade they rightfully deserve.

Let us not forget that the rural banks under the beleaguered Legacy Group do not represent the rural banking sector which has taken the cudgels for the whole banking sector in serving the financial needs of the much neglected countryside.

Rural banks, by virtue of Republic Act 720 or the Rural Banks Act, have the inherent mandate to serve the unserved and underserved population, especially those in the provinces.

The Rural Banks Act, which was approved in 1952, positioned rural banks as catalysts for comprehensive rural development by providing people with easy reach and access to credit facilities.

In the more than 50 years of existence of the rural bank industry, it continues to be a significant contributor in the country’s economic development. As financing agents in the countryside, rural banks largely determine the quality and extent of developments in the rural areas.

Among the basic services offered by rural banks are loans for sari-sari store owners, farmers and fishermen and even loans worth P5,000 or less for microentrepreneurs. These are small-scale loans in terms of amount but these are the types that have the biggest impacts in the lives of people in the rural communities.

For its part, the Rural Bankers Association of the Philippines (RBAP), armed with its present membership of over 650 individual rural banks with over 2,000 branches spread all over the country, works to further strengthen its thrust of serving the unserved and underserved communities and to provide the much needed financial services of people in the countryside.

This thrust is supported by the fact that in more than 40 percent of the areas where rural banks are located, there are no other forms of financial institutions to be found aside from rural banks. For instance, only rural banks service the banking needs of communities such as Alabat in Quezon, Lagawe in Ifugao and Jordan in Guimaras among many other previously unbanked areas. This shows how rural banks are able to serve the needs of underprivileged and previously unserved communities.

But while the areas they serve may seem backward in some respects, rural banks are far from being old and antiquated in their ways. To solidify its thrust, RBAP has spearheaded the move to innovate the industry through the use of technology. It recently embarked on a pioneering technological innovation for the banking industry – the mobile banking. In partnership with Globe Telecom and the USAID-supported MABS program, rural banks now provide their clients access to a wide range of banking transactions using only their mobile phone.

Among the mobile banking services provided by rural banks are paying micro-loans and bills, making deposits and withdrawals, sending or receiving both domestic and international remittances, disbursing and receiving salaries, and accepting mobile payments to buy and sell goods. This pioneering mobile banking technology is a first in the Philippine banking system and is being recognized globally for its significant impact in elevating rural banking services.

In addition to mobile banking, rural banks, with the goal of making the financial services more accessible to the people in the countryside, have also installed automated teller machines (ATM) in select and strategic rural bank branches.

With the ATMs serving some of the remotest areas, the locals need not travel many miles to the nearest city where there is an ATM and in the process spend a significant amount, just to withdraw their money.

The Bangko Sentral ng Pilipinas (BSP) acknowledges the contributions of rural banks in providing the much needed services by the people and in reaching the farthest and remotest of places to be able to deliver these services.

According to BSP, rural banks do not simply use new virtual networks and branches, as they are now available to them. They are even going the extra mile in finding ways that are practical, as they are innovative, to make these new channels more attuned to the needs of their clients in the countryside. With the use of mobile phone banking, rural banks opened the unique opportunity to reach a wider spectra of clients and tap those who are traditionally marginalized and “unbanked” or the lower income segments of the population.

During the recent celebration of the Rural Banking Week, RBAP president Tomas Gomez IV noted that rural banks today have adopted technology like they never have before. Five years ago, for example, mobile phone banking and ATM services were non-existent in the rural bank space. Today, rural banks are taking the lead globally in mobile phone banking applications. There is rapid ATM deployment by rural banks, with more looking to upgrade their core banking software to improve service and increase product offerings, he pointed out.

The mobile banking and the ATMs are proofs to the rural bank industry’s understanding of the banking needs of the people in the countryside. These technological advances likewise puts premium in the industry’s ability to innovate itself, thereby keeping in step and even getting ahead in terms of using technology in making banking faster, easier and more accessible for the unserved and underserved communities.

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