Manila-based Asian Development Bank (ADB) is releasing grants amounting to $665,000 or roughly P32.28 million to help nine local rural banks and a bank consortium for its digital transformation and financial inclusion efforts.
In a statement Monday, Feb. 19, ADB said the grants are part of its Fintech for Inclusion Transformation (FIT) program funded by the High-Level Technology Fund and the Republic of Korea e-Asia and Knowledge Partnership Fund. It is also supported by the Bangko Sentral ng Pilipinas and the Rural Bankers Association of the Philippines.
The grant awardees include six banks from Luzon, one from the Visayas, and two from Mindanao. These are: Banco San Vicente; Camalig Bank; MVSM Bank; Rural Bank of Guinobatan; Rural Bank of Medina; Rural Bank of Montalban; Rural Bank of Porac; Rural Bank of Silay; and Rural Bank of Tandag. Meanwhile, the Good Bank is a consortium composed of three rural banks.
The selected nine rural banks and consortium mostly serve as clients women, farmers, fisherfolk, and micro, small, and medium-sized enterprises (MSMEs).
“The FIT program builds on ADB’s efforts to utilize technology to increase the efficiency, sustainability, and resilience of the finance sector, especially those which service underserved sectors in the country,” said ADB Director for the Finance Sector Group Emma Xiaoqin Fan.
ADB said the grant will help the rural banks make their operations more efficient through digitalization, as well as reduce operational expenses and friction costs; expand their reach; improve customer service; and build more resilient financial institutions overall.
“Some of the digital transformation proposals involve putting up cloud-based core banking systems, loan origination systems, and credit scoring systems,” it noted.
ADB said it has hosted a series of workshops and consultations with industry experts to assist the applicants in creating viable digital transformation solutions. It also hired a consulting firm to evaluate proposals and conduct due diligence, interviews, and assessment of the impact and institutional health of qualified applicants.
The FIT program, part of the ADB-financed Inclusive Finance Development Program, support government reforms to “expand Filipinos’ access to financial services, especially the unbanked segment of the population.” It is also linked to the government’s National Strategy for Financial Inclusion.