First rural bank Small Claims Court case successfully settled

January 05, 2009 – The first small claims case hearing involving a rural bank in the Philippines was successfully conducted in twenty minutes and the case decided on in one-and-a-half hours in a Small Claims Court (SCC) in Davao. The case involved a microfinance client with an outstanding loan of Php 18,000 (from an original loan of Php 40,000) from a rural bank; the client agreed to settle the amount with the bank within the next eight months.

The SCC concept originated in the United States and was formulated for adoption in the Philippines with assistance from United Stated Agency for International Development (USAID) and the American Bar Association (ABA)-Rule of Law Initiative (Asia Division). The project is currently being tested in pilot courts all over the country. Recently, the USAID-supported Rural Bankers Association of the Philippines – Microenterprise Access to Banking Services (RBAP-MABS) Program collaborated with the Rule of Law Initiative to promote the use of SCCs to facilitate the processing and collection of micro and small enterprise delinquent loans below Php 100,000.

The SCC project was established to provide speedy and cost-efficient resolution of cases involving small claims not exceeding Php 100,000. Filing a case with an SCC does not require a lawyer thus saving up on legal fees.