ADB $300 million loan to boost filipinos' access to financial services

The Asian Development Bank’s (ADB) Board of Directors has approved a $300 million loan to support the Philippine government’s effort to expand financial services across the country, especially among entrepreneurs, small businesses, farmers, workers, and individuals, including women and vulnerable households.

The policy-based Inclusive Finance Development Program aims to help the Philippines develop a resilient and inclusive financial sector. The project will help the government strengthen the country’s institutional and policy environment for expanding financial services, invest in support networks and infrastructure such as the national retail payment system and the new national identification system, and improve the abilities of financial institutions, including rural banks, to offer financial products, particularly through the application of new technologies. As a result, more people are expected to open bank accounts, save more at financial institutions, and have access to a wider range of other financial products and services.

“The program reflects the strong commitment of the government and ADB to expand financial inclusion in the Philippines and address the challenge of high inequality, which has persisted despite rising and sustained economic growth,” said ADB Senior Financial Sector Specialist Ms. Kelly Hattel. “The program builds on important actions taken by the government to strengthen the policy framework for financial inclusion and the infrastructure that supports the delivery of these services. We believe this program has all the right ingredients to achieve positive gains in financial inclusion and to improve the lives of Filipinos from Tawi-Tawi to Batanes.”

Since 2000, ADB has worked with the government and other development partners to support the Philippines’ goal of increasing financial inclusion. Areas of support cover agriculture finance, financial literacy, microinsurance and crop insurance, and Islamic finance. ADB is also supporting the effort of a rural bank in Mindanao to migrate its core banking system to a cloud-based core banking solution to reduce cost, improve efficiency, and increase overall outreach.

In addition to the ADB loan, the program may be funded by an additional €150 million in financing by the Agence Française de Développement and joint technical assistance, which will support the government’s goal of building a resilient and inclusive financial sector.

Original source: ADB
Published on 19 September 2018