President’s Message

2005 Annual Credit Management Conference of Visayas Rural Banks
07-08 April 2005
Villa Hotel, Ormoc City

Congratulations to all Visayas rural bankers on the event of your 2005 Annual Credit Management Conference

The theme: “Rural Banks: Partners of Micro, Small and Medium Entrepreneurs” answers the call of the United Nations for 2005 to be the International Year on Microcredit and highlights the indispensable role of micro, small and medium enterprise credit towards community growth and social progress. The RBAP encourages its member banks to adopt in their business plans the commitment to attain countryside development.

It is imperative that rural banks unite with the government and multilateral organizations to expand development especially in the countryside through the MSMEs, the so-called engines of economic growth. Local economies are now versatile economies with the influx of new development alternatives. Undeniably, the RB sector greatly contributed to these laudable improvements by servicing the farmers, fisherfolks, micro and small entrepreneurs with credit, savings and other non-financial services.

The unanimity of our vision for the countryside and for the whole sector was instrumental in bringing about significant improvements to our financial performance for year 2004. As of September 2004, total assets of the industry jumped by 13% posting a total of P96.817 billion. Deposits rose by 15.53% to P68.174 billion, 89.41% of which was utilized as loans. As a result, the loan portfolio of the industry jumped up to 12.32% to P60.953 billion. Capital resources also grew by 10.85% to P15.49 billion and asset quality based on non-performing assets to total assets ratio improved from 15.15% to 15.02%. Also, the microfinance performance of the industry recorded P3.06 billion in loan portfolio benefiting 508,701 borrowers.

The industry’s financial performance manifests that we have performed well but let us not miss the fact that we can actually attain more. With this in mind, RBAP and its strategic partners continuously develop programs and valuable projects to improve the capability of the rural banking industry. Insurance partners developed new insurance plans to respond to the needs of the countryside market thus, further strengthening the lending capabilities and reach of the RB sector. Also, a pilot testing of the RBAP Text a Payment project is running for more than three weeks now in four selected rural banks. The project introduces the use of modern telecommunications technology to facilitate easier, cheaper and more efficient microfinance loan payment and collection via cellular phones. Other profitable applications of this technology will soon be developed to bring in better deposit services, money transfers and bills collections.

The microfinance technology produced many successful entrepreneurs in the countryside. Most of them graduated to a larger business operation as small entrepreneurs with higher credit demand for its operation and sustainability. Rural banks are now challenged to meet the increased credit requirements of their clients. Unity within the sector, our creativity and solid experience in rural finance is definitely our edge in contending with these challenges and to fully meet the demands of the small entrepreneurs.

In as much as we want to achieve development in the countryside and for the country as a whole, we desire sustainability of these on-going initiatives. And with that, rural banks being the prime movers of development must continue to service its countryside clients with financial and non-financial services and be the key to livelihood, production and economic activity in the community. Thus, it is important that the principles of good corporate governance become normal appendages to our day-to-day operations. Financial size of the bank is not the lone measure of success and excellence. More often, success and excellence are dependent on the corporate values applied in the daily banking operations.

Again, as a network of stable and dependable partners of micro, small and medium entrepreneurs, let us live up with our pledge to continuously improve our operations and our commitment as movers of countryside development.
“Sa rural banks mga pamayanan ay uunlad, ang ating bansa ay uusad!”

Mabuhay ang mga rural banks!

SENEN D. GLORIOSO
RBAP President, 2004-2005