Rural bankers are now enjoying an increase in credit facility takers from the grassroots clients, as this particular market are now more aware in low interest micro-financing facilities, than availing underground financial sources from loan sharks.
Rural Bankers Association of the Philippines (RBAP) national president Paz C. Radaza said that this development has allowed rural bank operators all over the country to see growth, despite the stiff competition.
In a press conference held Sunday night, Radaza said loan sharks or locally known as 5/6 lenders are no longer seen as competitor of rural banks, while micro-business community are now learning to source their daily capital requirements from the small banks or rural banks.
Radaza attributed that government’s strong policy campaign to boost the micro-finance in the Philippines. She said this has made growing number of community-based micro entrepreneurs not to depend their fund resources from underground loan sharks.
Because of government’s support, she said rural banks are now starting to relax their documentation requirements, shying away from requirement collaterals for group lenders, although individual borrowers are still required to present collateral to lessen risk.
Like the daily loan sharks, rural banks are also engaged in daily collection basis, for the small-time and daily earning borrowers.
In the far-flung towns, Radaza said rural bank operators are even offering soft loans to cultural-health providers or the “manghihilot” or “mananabang” and other micro ventures like tricycle drivers, sari-sari stores, market-vendors, among others.
Rural banks are the partners or conduits of big state-owned banks. – Ehda M. Dagooc