WHENEVER we talk about banking, the first thing that comes to mind are the large commercial banks that's owned by any of the major conglomerates in the country. Whenever any of our friends, family or colleagues pull out a credit card to pay something, it's usually from names such as Metrobank, BDO or BPI. Most people tend to think that that's the all in all of the banking industry in the country. However, they tend to overlook one key aspect that's a major driver in small and medium enterprise (SME) growth, and those are the rural banks that operate in the various provinces of the Philippines. These smaller banks provide businesses with accessible financing alternatives to SMEs that operate outside of the economic hot spots such as Metro Manila.
Rural banks are a vital part of the financial ecosystem because they can serve as another source of capital for SMEs and promote economic development in the countryside. According to the Bangko Sentral ng Pilipinas, rural banks have lent over P20 billion worth of loans. This metric shows that rural banks still possess a sizable role in empowering SMEs, particularly in the countryside to achieve their maximum potential.
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