Rural Banks Leveraging Mobile M ney to Increase Access to Banking Services

Roselle M. Hernandez
Mobile Phone Banking Specialist RBAP-MABS Program, USAID

5th Mobile Commerce Summit 2012

Fullerton Hotel, Singapore 03.21.2012

The MABS Program

The Microenterprise Access to Banking Services (MABS) Program is an RBAP program supported by USAID that provides technical assistance and training to rural banks in microfinance best practices. It is designed to develop the capability of rural banks to profitably provide financial services - loans, deposits, insurance, money transfers and mobile banking - for microenterprise clients.

Indicators # Banks & Branches # Micro-Loans Disbursed # Micro-Borrowers Amt. Loans Disbursed # Micro-Depositors managed

Status: Dec 2011 100/1,300 3M 950,000 $900M 1.4M

# Microinsurance clients

450,000

The Rural Banks

LUZON

Most rural areas have limited access to financial services. Rural banks are ideal Financial Institutions to facilitate access to banking services for rural and lower income individuals.

VISAYAS

MINDANAO

There are 600 rural and cooperative banks throughout the Philippines with over 2,700 branches/units serving more than 85% of all municipalities.

Philippines: Text Capital of the World

Mobile Phone Subscribers vs. Bank Accts (Philippines) Mobile Phone Subscribers (Philippines) Mobile Phone Subscribers (World Projections)
1998 2011 > 34 M > 90 M

> 90% penetration rate 2011 (ITU): 4.6 Billion 2012 (ITU): 5.6 Billion > 90 million subscriptions

Bank Accts Mobile Subs

>23 M > 1.7 M

Opportunities for the use of Mobile Money through Rural Banks

Mobile Phone Industry Remittance Business
Rural Banks

Growing subscriber
Stiff competition reducing costs Affordable handsets

Growing international remittance at PhP 20B for 2011 Domestic remittances

> 40% of population in the rural areas Rural banks have 2,700 branches & other banking offices

Growing mobile money platforms (GCASH/Smart Money)

Transfer methods increasingly using Motivated as an industry to Mobile Money (GCASH/Smart Money) grow to scale

Preparing Rural Banks & MFIs to Promote Mobile Money & Mobile Financial Services

Mobile Phone is more than just a Phone

Loan and Bills Payment Deposit

Payroll Servicing through GCash

With Mobile Phone, you can now

Client
Withdraw

Purchase goods and services

Send Money (Remittance) Receive Loan Release

Reload Airtime

The Business Model for Rural Banks to offer and use Mobile Money

Reduce Cost

Greater Efficiency

Increase Deposits

Improving Outreach

Pilot Tests: Issues and Lessons Learnt

Acceptance and fear of the use of technology especially among elderly clients Lack of Mobile Money Outlets or source especially in the rural areas Value Proposition for Clients, Merchants & Customers

Working with Networks of MFIs (Rural Banks) can be key to outreach Increasing of volume and usage of mobile money in the rural areas.

How to reach clients in remote communities awareness and information campaign

Overcoming Cash-in/Cash-out Constraints in Rural Community

Bank identified Local Merchants and assisted them to become MNO licensed Mobile Money Agents in rural communities
Larry Bat-ao, Cantilan Bank Merchant-Deposit and provider of GCASH

Rural Bank Guidelines for Selecting Merchants as Mobile Money Agents

Depositor Active Globe SIM Registered to GCASH Stable business with sufficient cash flow Willing to serve bank clients within the area and to follow KYC requirements Willing to follow standard procedure & transaction fees Willing to comply with Mobile Money Issuer accreditation process

Overcoming Cash-in/Cash-out Constraints in Rural Community

Bank established kiosks, sub-offices, and other business offices (OBOs) to provide Cash-In and Cash-Out

Overcoming Cash-in/Cash-out Constraints in Rural Community

Bank coordinates with GXI for Sub-Dealers to provide Cash-Out functions Banks also provide needed liquidity in rural communities

Know-Your-Customer (KYC) Challenge

FACECARD

Challenge:
Need to simplify KYC in rural areas

Proposed Solutions:
Standardized ID/ATM Card issued by the rural banks in partnership with GXI FaceCard FaceCard used for KYC FaceCard may also be used for discounts, perks, promos, loyalty, etc.

Developing Mobile Money Ecosystems

Commitment of Bank Management Development of Mobile Money Ecosystem Sufficient Cash-In/Cash-Out Agents/Resellers Creating Awareness of the use of Mobile Money Promote the value proposition for businesses, clients, and customers

Email: rhernandez@rbapmabs.org
Websites: www.rbapmabs.org www.mobilephonebanking.rbap.org www.youtube.com/RBAPMABS

5th Mobile Commerce Summit 2012

Thank Y u!

Fullerton Hotel, Singapore 03.21.2012