P1B to support rural banks’ digitalization

STATE-OWNED Land Bank of the Philippines (LandBank) said it is rolling out a P1-billion lending program to enable countryside financial institutions (CFIs) to digitize their banking operations.

In a statement over the weekend, the bank said that through the Digitalization of Countryside Financial Institutions (DIGI-CFI) Lending Program, LandBank will finance digitalization projects, including payment for subscription or licensing fee for commercial software or outsource information technology systems.

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

Under the DIGI-CFI Lending Program, rural, thrift and cooperative banks can borrow up to 80 percent of their total project cost with an interest rate of 5 percent per year for term loans, fixed for the first year and subject to re-pricing thereafter, and payable up to five years.

For short-term loans, the prevailing rate of LandBank at the time of the loan availment applies, but not lower than 5 percent per annum, payable up to one year, and available via a 180-day promissory note.

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“LandBank aims to boost the capacity of rural banks to contribute to the digitalization wave. The possibilities for growth are endless, with the end goal of promoting financial inclusion and providing innovative and responsive digital financial services,” said LandBank President and Chief Executive Officer Cecilia Borromeo.