Rural banks note hike in deposits, loans

Rural banks supported by the Microenterprise Access to Banking Services (MABS) program of US Agency for International Development (USAID) have posted an increase in their deposits and loan portfolio.

During the MABS 32nd Management Committee Meeting held last month in Cebu City, MABS chief John Owens reported that MABS program has significantly helped rural banks improve micro-entrepreneur’s access to microfinance as recently shown by the positive loan and deposit performance indicators.

MABS is a program that assists rural banks in the Philippines develop their capability in order to increase their banking services for the country’s microenterprise sector. It is jointly implemented by the Mindanao Economic Development Council (MEDCo) and Rural Bankers Association of the Philippines (RBAP) since 1998.

Owens said that MABS has increased its participating bank units from 97 in October last year to 102 as of February this year.

This has brought an increase in the number of MABS participating bank depositors from 130, 814 to 132, 517, thereby increasing the deposits from P156.82 to P157.02 million from October 2002 to February this year.

In the same period, loan portfolio of MABS-supported banks is also up from P216.59 to P230.19 million.

While the number of outstanding borrowers slightly rose from 33,540 to 33,579, the improved loan portfolio has infused more new borrowers who increased from 3,307 to 3,282.

The improvement in deposits and loan portfolio indicates the micro-enterpreneurs’ growing confidence in getting access to MABS-designed microfinance program as a means to start a small business or expand their operations through the purchase of additional equipment and other inputs.

Over the years, MABS has worked with more than 100 rural banks units in the Philippines, majority of which are in Mindanao. Through their participation in MABS program, these banks have developed and designed loan products that have become attractive to many micro-enterpreneurs.