French government assists Philippine rural banks
Digital transformation in Philippine rural banks seen
MANILA – A Grant Facility Agreement worth €800,000 or P47.9 million was signed between the Rural Bankers Association of the Philippines (RBAP) and the French Development Agency to support the digital transformation of inclusive financial institutions, beginning with rural banks.
Rural banks have played significant roles during the past eight decades in promoting inclusivity in markets underserved by traditional commercial banks. To remain competitive, rural banks need to upgrade and adapt from manual to digitalized processes to increase efficiency, reduce costs and better serve their respective clients.
The technical assistance involves training, capacity building, and communication and awareness-raising activities in order to support the digital transition of core-banking systems to the cloud, hoping to further develop the financial inclusion of underserved and unbanked populations in the country.
The same 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 Financial Development Program (IFDP). The AFD, together with the Asian Development Bank (ADB) has been supportive of this program since 2019 through a €100 million 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, particularly the poor and the rural population with the consolidation of the institutional and regulatory environment and the improvement of financial infrastructures and the capacity building of financial service providers, supervisors, and regulators.
Mrs. Elizabeth Carlos-Timbol, RBAP President said they are thankful for the support and trust the AFD gave her association.
“As 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,” she said. She expressed optimism through the partnership, they can jointly create capacity building programs for the needs of rural banks.
“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,” said French Ambassador Michèle Boccoz.
He added the COVID-19 pandemic has disrupted societies and leads everyone 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,” he added. (Melo M. Acuña)
French Ambassador Michèle Boccoz. (French Embassy File Photo)