Landbank launches P1B lending facility for rural banks to go digital

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The Land Bank of the Philippines (Landbank) is launching a P1 billion loan program to enable rural banks to digitize their banking operations to reach and serve more underserved and unbanked Filipinos.

Through the Digitalization of Countryside Financial Institutions (Digi-CFI) Lending Program, the Landbank will finance digitization projects, including payment of subscription or license fees for commercial software or outsourcing of IT systems.

Under the program, the state bank can also finance the purchase of hardware or computer equipment and the purchase or development of commercial software, application or system, including maintenance and support.

Cecilia Borromeo, President and CEO of the bank, stressed the importance of digital transformation for rural banks to remain resilient and relevant in the evolving banking landscape.

“Landbank aims to strengthen the capacity of rural banks to contribute to the digitization wave. The opportunities for growth are endless, with the ultimate goal of promoting financial inclusion and providing innovative and responsive digital financial services,” said Borromeo.

Under the Digi-CFI loan program, rural, savings and credit unions can borrow up to 80 percent of their total project costs at an interest rate of five percent per annum on term loans that are fixed for the first year and subject to reassessment thereafter, payable until to 5 years.

Short-term loans are at the Landbank rate in effect at the time of drawing, but not less than five percent per annum, payable in up to one year, and available on a 180-day promissory note.

By the end of April 2022, the Landbank’s outstanding loans had reached P9.66 billion in support of 88 rural financial institutions across the country, demonstrating the Bank’s unwavering commitment to promoting financial inclusion and rural development. (with PR)

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