Big fish in a small pond

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Our society tends to focus too much on size. “The bigger, the better,” the usual saying goes. “Size matters!,” others would quip. Often overlooked in our obsession with anything large is the quiet resiliency and efficiency of the little guys. While the big ones get the glory and prestige, the little guys just keep on plugging away and achieve success nonetheless, albeit through a longer route usually.

The same can be said for industries like banking. While the bigger universal and commercial banks have bigger revenues and assets and get all the publicity, their smaller counterparts are no slouch either. Community-based financial institutions like rural banks have developed a niche that enables them to not only thrive in their own market, but practically become indispensable among the poor.

Rural banks serve as the main vehicle for financial intermediation and capital formation in rural areas. They often have branches in locations not served by other banks. Most bank owners and staff grew from the same community as their clients. Thus, the bankers and bank employees know the local needs and circumstances far better than their bigger competitors do. Lending judgments can be based on personal knowledge and understanding of the financial conditions of the customers. Clients appreciate that personal kind of service. They tend to reward that professional-personal touch with more availment of the bank’s services.

In short, the more love you give, the more love you get.


The overall success of rural banks will be contingent on the success of the local communities and vice versa. The combination of enhancing network value and offering a broader range of solutions strengthens the rural bank’s market position with individual customers and communities.

Another importance of rural banks in a community is their ability to provide loans faster than any other type of banks. Even with the entry of big banks in various municipalities, the rural banking industry can pride itself with being able to give loans as fast as possible. A big factor to this is the aforementioned familiarity between banks and clients.

The role of rural banking is paramount in the expansion of the economy in the countryside, by providing people living in the rural communities with basic financial services.

Furthermore, rural banks spearhead the government’s financial inclusion efforts, through the utilization of varying services to address the needs of their client base in the countryside, including micro-housing loans, micro-agri loans, micro-insurance and micro-deposits.

Despite their smaller stature compared to their larger brethren, rural banks remain very important to the cause of countryside development because of their key role in fueling economic growth of rural areas.

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