Competitive strategies for the Sambali Community Rural Bank, Inc.

• Main Author: Ubaldo, Gerardo
• Format: text
• Language: English
• Published: Animo Repository 1997
• Subjects: Banks and banking > Philippines; Business Administration, Management, and Operations
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/2316
• Institution: De La Salle University

The banking environment of today is beset by the rapid pace of accelerating change. The Philippines' accession into CATT has hastened the liberalization of the financial services industry which is dominated by banks. This has paved the way for the lifting of restrictions which hampered growth in the past. The entry of 10 new foreign banks was a significant consequence of liberalization because it has intensified competition in a once-protected industry. This is the environment in which subject bank operates. The Sambali Community Rural Bank, Inc. is a new bank having been established in October 28, 1994, but has already surprised many by its success. After a little more than two years of operation, it is now in the top three rural banks in Zambales. It has two branches, 1 in Palauig, a town 16 kilometers to the North, and 1 in Sta Cruz, Zambales. its paid-in capital of P10million was unheard of in Zambales prior to its entry. One year after its opening, total asset stood at P22.3 million. As of Novembe 22, 1996 or less than 13 months later, it had almost doubled its resources to P41.4 million. To appreciate these figures, we must keep in mind that the setting is a rural, relatively undeveloped area and the locality does not offer a lot of opportunities for business. Some of the biggest rural banks who have been in operation since the 1960s have grown to only P50 million or less. The bank is the financial arm of a group of companies which subscribe to the area management approach to development. At the top of the group is a company called SASFI, a non-profit organization established in 1996 primarily to provide scholarships to the needy but deserving youth of Zambales. In 1990, SASFI expanded its program to serve the socio-economic needs of the people. Accordingly, it launched the SAMBALI-CED projet which has become its flagship program which is geared primarily to the marginalized sectors of society. The area management approach is defined as a set of private-sector led, community-based integrated management systems that harness direct people's participation in creating a strong and diversified local economy in harmony with the ecosystem cycles it is interfaced with. The community enterprise strategy is an essential component of the area management approach. It is conceived in a system whereby a nymber of families come together to undertake economic/business enterprises at the household level which they themselves manage while at the same time being interlinked with other family clusters through community management centers at family, barangay and town levels. It is combined social and business system usually integrated from inputs supply or production to final marketing wherein all components of the system are able to communicate, coordinate and self-regulate the business. As a social system, it involves broad participation from a given community who participate as producers of inputs, small growers, intermediary markets, processors and laborers with such participation coming in the firm of household level involvement all the way to involvement in cooperatives and associations. The work is divided and coordinated among membercos. are as follows. SASFI organizes communities, trains people and helps establish community enterprises the bank finances projects and the Community Enterprise Support, another member co., extends marketing assistance. The bank has proven, thru this approach, that this sector can be profitable. Its financial ratios are very robust. This study was partly to examine the competitive strategies of the bank in order to arrive at an objective assessment and evaluation of its current posture and give recommendations. The bank's vision is to become the area management bank. Its mission is: To satisfy the need for financial services of the people of Zambales, particularly the marginalized sector thru area management banking. Its objectives are (1) To finance the creation of a vibrant economy with and for the people and (2) To become the biggest rural bank in Zambalez in terms of net income, total resources and total capital. How it can accomplish all these is the subject matter of this study.