Rural Bank of Panabo (RBP), Philippines (Case Study)

Using the Rural Bank of Panabo (RBP), The Philippines, as a case study, this paper presents the findings of the Consultative Group to Assist the Poor (CGAP) on savings mobilisation. This paper:

• Provides a panoramic view of the macroeconomy, the financial sector, and the social and cultural context;
• Undertakes institutional analysis of the RBP network system, particularly of its characteristics, institutional type, governance and organisational structures;
• Explores its demand-oriented savings products and technologies;
  • Specifically looks at the characteristics of the RBP's classic savings products and the demand for such saving services among rural low income populations;
  • Notes that no in depth market studies were conducted prior to the introduction of these products.

Concludes that:

• The case of the Rural Bank of Panabo illustrates that a small financial institution can successfully mobilise savings from a low-income target clientele without having a specific strategy, approach or philosophy towards savings;
• The strong community orientation and private ownership of the institution suggest that rural banks are an effective type of financial institution in mobilising savings in rural areas;
• The relatively small capital base of rural banks in comparison to commercial banks and the nature of their operations with low-income clients requires prudent liquidity and asset management;
• RBP has acquired the image of a modern and reliable community based bank having been in operation for 30 years without closure because of prudent liquidity management.

[Adapted from the author's abstract]