France provides P47.9-M in grant to support PH rural banks

MANILA – France has provided EUR800,000 (approximately PHP47.9 million) in grants to the Rural Bankers Association of the Philippines to support the country’s digitalization of rural banks.

The French Embassy in Manila on Friday said the grant finances training, capacity building, and awareness-raising activities for the digital transition of core-banking systems to the cloud, with a focus on developing the financial inclusion of underserved and unbanked populations in the country.

RBAP president Elizabeth Carlos-Timbol said they look forward to working with the French Development Agency (AFD) to create programs tailor-fitted to the needs of the rural banks.

“As the 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. Through this partnership, this goal is finally realized,” she said during the signing of the grant facility agreement.

The embassy said rural banks in the Philippines have played significant roles in promoting inclusivity in markets underserved by traditional commercial banks. And to remain competitive, they must modernize and adapt from manual to digitized processes.

“This is a further milestone in the bilateral relationship between our two countries,” French Ambassador Michèle Boccoz said.

“The Covid-19 pandemic is disrupting our societies and leads us 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,” she added.

Laurent Klein, AFD country director in the Philippines, said the agreement also marks a “major step forward” in France’s collaboration with the Asian Development Bank (ADB) to support inclusive finance in the country.

“The AFD is very pleased with the partnership concluded with the RBAP. With a wide range and diversity in size and activity levels, rural banks remain in a unique position to extend the reach of financial services in rural areas,” he said.

“In line with our organization’s strategic objectives to support financial systems and fight social and economic inequalities, this technical assistance will contribute to promote access to quality digital financial services for all, including the most vulnerable part of the population,” he added.

The grant was provided within the framework of the global public policy reform of the financial inclusion sector in the Philippines and the implementation of ADB’s Inclusive Finance Development Program.

The AFD, alongside ADB, has been supporting this program since 2019 through a 100-million euro sovereign loan of the AFD to the Philippine government.