This paper examines the limitations of Philippine rural banks in providing microfinance, and advocates information technology as a solution.
Although rural banks in the Philippines are ideally positioned to deliver microfinance, they are limited by difficulties in branch expansion, constraints in collection and transaction management and inadequate information flow. An effective IT system would:
* Automate business processes, with data entry at source;
* Provide information for effective supervision and control;
* Facilitate strategic decision making;
* Help the bank merge regular and microfinance operations.
Microfinance operations of rural banks in the Philippines are set to increase. In the future, regulators, supervisors and funders will exert greater pressure on rural banks to implement effective systems and information. Requirement for IT will also increase, given its de-limiting capabilities. An IT company in the microfinance sector of rural banks would aid:
* Innovation in product development, implementation and pricing,
* Large volumes and rapid deployment;
* Integration with regular banking;
* Hardware bundling.
