On March 17, 2012, SEDPI\u2019s President, Mariel Vincent Rapisura delivered at the Visayas Rural Bank Management Conference held at the Waterfront Hotel in Cebu City. A total of 136 participants from 42 rural banks attended the event.<\/p>\n
Mr. Rapisura shared opportunities and product innovations for rural banks in the following areas: microinsurance, financial products linked to remittances; microhousing; microleasing; rural and agricultural finance; small and Medium Enterprise Financing (Missing Middle); alternative Energy; and financial Literacy.<\/p>\n
For microinsurance, he explained that there are a lot of opportunities to be seized in developing climate change-related products. As a country frequently visited by typhoons and floods, it is obvious that rural banks should have financial products that protect end clients from these. Rural banks also initiate the establishment of mutual benefit associations to service their microfinance clients. Mr. Rapisura stressed that health insurance should also be given to poor clients. He gave as an example, Klinikalusugan, a social enterprise that delivers affordable health care services, as a means to provide access to health services for the poor. He stressed, however, that health is not within the competency of rural banks. It is therefore imperative for rural banks to network with organizations to provide these services.<\/p>\n
The Philippines is the third largest remittance receiver country. Ten out of the 30 million workforce are abroad. Rural banks, due to their extensive branch network could provide alernative financial products to migrants and their family members. Mr. Rapisura explained that rural banks should encourage OFWs to save for more than five years to take advantage of tax incentives. Rural banks should also use as a marketing strategy the deposit insurance protection offered by the Philippine Deposit Insurance Corporation of up to PhP500,000. Productive loans for migrant family members guaranteed by future remittances of migrants is another creative means of designinng financial products to capture this market segment. This wil potentially break the cycle of dependency on remittances since the migrant\u2019s family members will have source of income in the Philippines. Other products that could be developed include educational and asset acquisition loans.<\/p>\n
Microleasing is a financial product that allows microfinance clients to access high ticket equipment or assets for production or value addition. Microfinance clients lose productivity because they could not afford high technology equipment for production or value addition. Through microleasing, the microfinanc eclients rent the equipment or asset from the microfinance institution. Mr. Rapisura shared that a recent program of the Department Agrarian Reform paves the way for this arrangement.<\/p>\n
Rural and agricultural finance is another area where opportunities abound but needs \u201cthinking out of the box.\u201d Mr. Rapisura explained that in a research they recently conducted private capitalists have more flexibility in providing repeat loans to farmers affected by calamities. He explained that microfinance institutions, such as rural banks, typically do not extend refinance loans to farmers even if the reason for non payment is due to calamities. This practice leads to the dependency of farmers to private capitalists. In this light, Mr Rapisura posed a challenge, \u201cIt is time to redefine delinquency. It should should not be based on repayment alone. A client who diligently pays loan amortizations and suddenly misses this due to calamities should not be considered as delinquent. Pro-poor financial products should be designed to assist the poor out of poverty.\u201d<\/p>\n
As a strategy, Mr. Rapisura cited a social enterprise, Good Food Community, Inc. (GFC) He shared that GFC provides credit to its vegetable farmers but bases its amortization on the weekly production of the farmer. It only requires payment to loans based on 20% of the production revenue of the farmer every week. With this method, the amortization amount is not fixed and the loan term can only be estimated.<\/p>\n
Mr. Rapisura also shared an opportuninity for rural banks to participate in the Asian Development Bank and Department of Energy\u2019s plan to extend e-trike loans through local government units. He encouraged rural banks to persuade the government to use them in extending the loans to ensure repayment of the e-trikes and avoid the program being politicized.<\/p>\n
Lastly, Mr. Rapisura encuraged rural banks to provide financial literac programs to their clients. He explained through financial education, rural banks can \u201cteach their clients to buy their financial products.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
On March 17, 2012, SEDPI\u2019s President, Mariel Vincent Rapisura delivered at the Visayas Rural Bank Management Conference held at the Waterfront Hotel in Cebu City. A total of 136 participants from 42 rural banks attended the event. Mr. Rapisura shared opportunities and product innovations for rural banks in the following areas: microinsurance, financial products linked […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"enabled":false},"version":2}},"categories":[2],"tags":[],"class_list":["post-265","post","type-post","status-publish","format-standard","hentry","category-microfinance"],"yoast_head":"\n