Cebuana Lhuillier Bank: Redefining Rural Banking in the Philippines

In the diverse landscape of the Philippine financial sector, Cebuana Lhuillier Bank has emerged as a financial empowerment champion, particularly in rural areas. Established in 1998 as the banking arm of P.J. Lhuillier, Inc., the parent company of the leading microfinance service provider, Cebuana Lhuillier, Cebuana Lhuillier Bank has embarked on a mission to foster financial inclusion among the unbanked and underbanked Filipinos.

Reaching the Unreachable

The bank has taken rural banking to the next level with its dynamic and customer-centric approach. By blending technology with its strong commitment to service, the bank achieved its core mission of empowering Filipinos towards an affordable banking lifestyle. To effectively reach as many Filipinos as possible, Cebuana Lhuillier Bank opened its first branch in Bacoor in 1998. This marked the beginning of a transformative journey for the bank. Over the next few years, the bank continued to expand its reach with five other branches in Calatagan, Cebu, Davao, Makati City, and Nasugbu. In 2024, the bank has grand plans to even reach more communities with ambitious expansion to General Santos City, Angeles City, Tanjay City, Iloilo, Bacolod, Tagum City, and Cagayan de Oro City. The bank’s journey was one of continuous growth and dedication. With each branch opened, it extended its financial services deeper into the heart of the rural Philippines, bringing the benefits of banking closer to the lives of countless Filipinos. Its extensive branch network became the lifeline for many individuals and micro, small, and medium-sized enterprises (MSMEs) seeking access to affordable financial services.

Dynamic Banking

In addition to its bullish expansion, Cebuana Lhuillier Bank quickly evolved into a financial powerhouse that rivaled national banks in the Philippines. Its commitment to financial inclusion was unwavering. Over two decades, the bank worked diligently to provide revolutionary banking services to individuals and MSMEs in local communities. Its transformative efforts began to yield visible results as more and more Filipinos turned to the bank for their financial needs. The cornerstone of this transformation was the introduction of the Cebuana Lhuillier Micro Savings Account. In 2019, Cebuana Lhuillier Bank collaborated with its parent company, Cebuana Lhuillier, to launch this groundbreaking product. It is an interest-bearing deposit account with a low initial deposit requirement and no maintaining balance. What set this product apart was its innovative structure. It is a bank product owned by Cebuana Lhuillier Bank and carried by Cebuana Lhuillier Pawnshop as its cash agent. This unique feature allowed more than 3,000 Cebuana Lhuillier branches to accept transactions on behalf of the bank. The result was an exponential increase in accessibility. The unbanked and underbanked population in the Philippines began to experience the benefits of affordable banking through Cebuana Lhuillier Micro Savings. It was a pivotal moment in the journey of the bank, and it underscored its dedication to empowering the lives of millions. Since its launch, Cebuana Lhuillier Micro Savings has reached over 7 million account holders as of October 2023.

Embracing Technology for Financial Inclusion

The bank not only expanded its physical presence but also its digital reach, further bridging the gap for those who lacked access to traditional banking services and raising its profile beyond the limitations of rural banking. Cebuana Lhuillier Bank has embraced technology to meet the ever-evolving needs of its clients. In 2020, the bank introduced the eCebuana mobile app, which allowed users to open Cebuana Lhuillier Micro Savings accounts online. This innovation made affordable banking even more accessible to Filipinos, offering the convenience of banking at their fingertips. Since its introduction, the app’s transactions skyrocketed by 128% in 2022, with 4.1 million transactions compared to 1.8 million in 2020. The transaction value of the app also rose significantly, reaching USD 243 million in 2022, compared to USD million in 2020.

Partnerships and Technological Innovations

Cebuana Lhuillier Bank’s commitment to technology did not end there. The bank has strategically partnered with BancNet and UnionPay to expand its card network coverage, ensuring increased ATM and POS access nationwide. Additionally, the bank has embraced online fund transfers through its collaboration with Instapay and PesoNet. In 2022, InstaPay transactions surged by more than fivefold, reaching 2.1 million transactions, with settlement values rising by over tenfold, from USD 17 million in 2020 to USD 205 million the following year. Another noteworthy milestone for Cebuana Lhuillier Bank was its early adoption of QR technology in the Philippines. Tapped by the Bangko Sentral ng Pilipinas (BSP) for the pilot launch of QR PH in 2022, the bank showcased its dedication to staying at the forefront of technological advancements in the banking sector. Furthermore, in a significant stride towards modernization, Cebuana Lhuillier Bank selected Temenos to revamp its core banking platform. This decision allowed the bank to gain the flexibility and agility to manage customer accounts and transactions with improved efficiency. By modernizing its core banking platform, Cebuana Lhuillier Bank will unlock the ability to introduce personalized products and affordable new lending products, such as motorcycle loans. These innovations are aimed at attracting new customers while ensuring sustainable growth.

Revolutionary Loan Products

Cebuana Lhuillier Bank has also strengthened its customer loan portfolio to make it more intuitive for the needs of ordinary Filipinos. As of September 2023, Cebuana Lhuillier Bank’s total bank loans stood at USD 58 million, up from USD 5 million in 2018, led by growth in business loans and in housing loan portfolios. The substantial increase was also a result of the launch of its Teachers Loans programs.

Financial Literacy Campaign

Aligned with the bank’s core vision to promote financial inclusion, Cebuana Lhuillier Bank continues to conduct its financial literacy campaign, known as “Iponaryo,” in partnership with Cebuana Lhuillier. The campaign educates Filipinos about the value of saving for rainy days or unexpected situations through its microsavings account. Collaborating closely with local governments, non-government organizations (NGOs), and schools, the Iponaryo movement remains at the core of the bank’s evolving identity as one of the Philippines’ most innovative rural banks. “Pioneering financial inclusion is our ethos at Cebuana Lhuillier Bank. We recognize that true progress comes from ensuring every Filipino, regardless of location and financial situation, has the tools for safe, accessible, and affordable banking. These revolutionary products are just the start of our journey. As we continue to shape the future of rural banking in the country, our commitment to inclusivity remains steadfast,” said Jean Henri Lhuillier, President and CEO of Cebuana Lhuillier and Vice Chairman of Cebuana Lhuillier Bank. Commenting on Cebuana Lhuillier Bank’s impressive journey, Cebuana Lhuillier Bank President Dennis Valdes said, “Cebuana Lhuillier Bank’s journey is a reflection of our promise to redefine the banking experience. Our footprint, fueled by cutting-edge initiatives and strategic partnerships with industry titans, is a cornerstone of our identity. We will continue to build on our legacy of becoming the reliable companion for ordinary Filipinos seeking innovative banking solutions.” Cebuana Lhuillier Bank’s efforts have not gone unnoticed, gaining recognition even on the regional scene. The bank earned back-to-back wins as Asian Banking and Finance’s Rural/Cooperative Bank of the Year for 2021 and 2022. The bank was recognized as one of the BSP Outstanding Stakeholders in 2023, named the Top UnionPay International Issuer for Debit Cards in the Philippines, and ranked among the Top 12 Debit Card Issuers in BancNet. Cebuana Lhuillier Bank’s journey from its rural roots to national prominence is not just a narrative of banking growth; rather, it is a testament to the transformative power of financial inclusion, technological innovation, and the obligation to the filipino.