ADB Approves $655-K Grant For Digital Transformation Of PH Rural Banks

The Asian Development Bank (ADB) has sanctioned a USD 655,000 grant to implement digital transformation solutions in nine rural banks and a bank consortium in the Philippines.

MVSM Bank is among the recipients of the grant. I Photo: MSVM Bank

This initiative aims to enhance financial inclusion, especially among underserved sectors in the country.

Funded by the High-Level Technology Fund and the Republic of Korea e-Asia and Knowledge Partnership Fund, this grant is part of ADB's Fintech for Inclusion Transformation (FIT) program.

FIT is integrated into the ADB-financed Inclusive Finance Development Program, which supports government reforms to expand Filipinos' access to financial services, particularly the unbanked population, aligning with the Philippine government's National Strategy for Financial Inclusion.

Emma Xiaoqin Fan, ADB Director for the Finance Sector Group, highlighted that the FIT program builds upon ADB's efforts to leverage technology in boosting the efficiency, sustainability, and resilience of the finance sector, particularly in servicing underserved sectors in the country.

The grant recipients, selected from across Luzon, Visayas, and Mindanao, include 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. Additionally, the consortium recipient is the Good Bank Consortium, comprising three rural banks.

These rural banks cater to women, farmers, and fisherfolk, as well as micro, small, and medium-sized enterprises.

They submitted their digital transformation project proposals to ADB, with industry experts providing support through workshops and consultations to create viable digital solutions.

The grant aims to enhance operational efficiency, reduce expenses, expand outreach, improve customer service, and fortify the resilience of these financial institutions. Proposed digital transformation initiatives include implementing cloud-based core banking systems, loan origination systems, and credit scoring systems.

Launched by ADB in June 2023, this program is being supported by the Rural Bankers Association of the Philippines (RBAP) and the Bangko Sentral ng Pilipinas (BSP).

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