A matter of trust

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Banking is a business of trust.

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It involves money, which is important to practically everybody, and anything important ought to be protected and entrusted only to those worthy.

Among the poor, the trust in rural banks has always been there and continuously builds up steadily, as these community-based financial institutions have shown the capability to not only protect the financial interest of their clients, but also the willingness and confidence to adopt new technologies and banking techniques to continuously improve services.

In the 2014 Annual Management Conference of the Confederation of Central Luzon Rural Banks (CCLRB), key personalities in the banking industry and its corporate partners will share some valuable inputs on how rural banks can be more competitive in today’s environment. That even in the face of the unrelenting dominance of the bigger universal and commercial banks, as well as the possibility of financial integration taking shape soon, rural banks can remain relevant by investing in scalable technology to be more efficient and profitable.

Aside from this, the speakers will point out that it is imperative for rural banks to continue professionalizing their management, and develop strategic alliances with other financial service providers to leverage their reach.

The latter will come into play with the recent extension of the Strengthening Program for Rural Banks Plus, a joint measure by the Bangko Sentral ng Pilipinas and the Philippine Deposit Insurance Corp. that offers financial and regulatory incentives to those that will engage in mergers and acquisition.

Meanwhile, another major event—the 2014 Confederation of Southern Tagalog Rural Bankers Annual Management Conference to be held this March—will also highlight the industry’s role in sustaining the country’s financial growth, and to reintroduce consciousness to the banking public that rural banks serve as the engine of economic growth in rural areas.

By making credit available and readily accessible in rural areas at reasonable terms, rural banks give small-scale farmers, fishermen and small and micro entrepreneurs with the means to not only improve their respective lives, but also the economic standing of the communities where they belong. It will create a domino effect wherein a single family, through the efforts of a rural bank, can positively influence other families as well. How does that work? Say an overseas Filipino worker beneficiary uses the remittance money sent though a rural bank to put up a small business. As that business grows, the beneficiary-family will then borrow from the rural bank to finance the growth. A bigger entrepreneurial venture will also mean potentially hiring more people, and also creating another opportunity for more business partnerships, like supplier of goods, for instance.

This distribution of opportunities, income and wealth will promote comprehensive rural development and raise the quality of life for all, especially the underprivileged.

Again, it is a matter of trust—trusting that the system works and trusting that the different components of that system will do their part. For the rural banking industry, their customers have to trust that rural banks will unwaveringly provide them access to financial services and, more importantly, take care of their hard-earned money with utmost dignity.

The two aforementioned important events give rural banks an opportunity to assure their clients that they will do just that and even beyond.

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