BSP chief wants rural banks to focus lending on agri, MSME sectors
MANILA, Philippines—The country’s monetary regulator wants to strengthen rural banks and empower these to better finance the needs of the neglected agriculture sector and those of small firms that are unable to obtain loans from larger lenders.
At an online briefing, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said the agency’s Rural Banking Industry Strengthening Program (RBSP) aims to launch initiatives to enhance the rural banking industry’s ability to provide financial services to the agriculture sector and micro, small and medium enterprises.
“The RBSP is aimed at improving rural banks’ operations, capacity and competitiveness amid evolving challenges in the banking industry,” he said. “This is part of the BSP’s broader and continuing efforts to boost the resilience of the rural banking industry.”
The RBSP is the latest rural banking initiative carried out by the BSP after the Consolidation Program for Rural Banks (CPRB), CPRB Plus, Strengthening Program for Rural Banks (SPRB), SPRB Plus and the Rural Bank Rehabilitation Program.
For RBSP, an interagency working group is in charge of performing tasks and activities necessary to achieve the program’s target outcomes.
“The end goal of the [working group] is to strengthen the rural banking industry to help achieve the mutual end-goals of the agencies,” according to Monetary Board Member V. Bruce Tolentino, who chairs the interagency body.
The working group’s other members included the Department of Agriculture and the Department of Trade and Industry, represented by the Small Business Corp. These agencies complement the BSP in terms of crafting strategies to channel financing to the agricultural and MSME sectors.
The steering committee, chaired by the BSP, provides the strategic policy direction to the interagency working group.
The steering committee plans to make an empirical analysis of the rural banking industry’s historical data before coming up with plans or measures.
This is necessary to determine the areas that need support and intervention and to implement an action plan suited to the unique circumstances and status of rural banks.
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