MMT Roadmap for Microfinance

Your Roadmap for establishing partnerships with Your Roadmap for establishing partnerships with mobile money issuers for microfinance:mobile money issuers for microfinance:

The Business Case of Rural Banks The Business Case of Rural Banks in the Philippinesin the Philippines

MABS Program The Microenterprise Access to Banking

Services or MABS Program provides technical assistance and training to rural banks in

microfinance best practices.

The program is designed to develop the capability of rural banks to profitably provide financial services (loans, deposits, insurance,

money transfer, micropayments) to microenterprises.

• Very rapid expansion over the last 10 years• More than 50% of Filipinos are mobile phone subscribers

Mobile Phone Banking Penetration

Mobile Phone Subscribers

(World Projections)

2008 (ITU): 4 Billion

2040 (World Bank): 6 Billion

Mobile Phone Subscribers

(World Projections)







Mobile Phone Subscribers (Philippines)

> 68 million subscribers> Projections 76 M (2010)

Mobile Phone Subscribers (Philippines)

> 68 million subscribers> Projections 76 M (2010)

> 50% penetration rate> 70 million subscribers> Projections 76 M (2010)

> 50% penetration rate> 70 million subscribers> Projections 76 M (2010)

Mobile Phone Subscribers vs. Bank Accts (Philippines)

1998Bank Acct: > 23 MMphone: > 1.7 M

2008:Bank Acct: > 32 MMphone: > 68 M

Mobile Phone Subscribers vs. Bank Accts (Philippines)

1998Bank Acct: > 23 MMphone: > 1.7 M

2008:Bank Acct: > 32 MMphone: > 68 M

1998Bank Acct: > 23 MMobile sub: > 1.7 M

2008:Bank Acct: > 32 MMobile sub: > 70 M

1998Bank Acct: > 23 MMobile sub: > 1.7 M

2008:Bank Acct: > 32 MMobile sub: > 70 M

Opportunities for Mobile Phone Banking

Mobile Phone Industry

Mobile Phone Industry

Subscriber base is growing rapidly.

Stiff competition among telcos is bringing costs of service down (unlimited text, rebates, promos.)

Mobile Phone Cost is getting cheaper.

Subscriber base is growing rapidly.

Stiff competition among telcos is bringing costs of service down (unlimited text, rebates, promos.)

Mobile Phone Cost is getting cheaper.

Remittance BusinessRemittance Business

Growing ($17B in 2009 & expected to grow in 2010)

Transactions and transfer methods now increasingly using E-Money (GCASH/Smart Money)

Growing ($17B in 2009 & expected to grow in 2010)

Transactions and transfer methods now increasingly using E-Money (GCASH/Smart Money)

Rural BanksRural Banks

More than 50% of population is located in the rural areas where many are under-banked or unbanked due to high transaction costs

Very minimal investment needed to offer mobile phone banking services.

More than 50% of population is located in the rural areas where many are under-banked or unbanked due to high transaction costs

Very minimal investment needed to offer mobile phone banking services.

Breakthroughs & Milestones: Mobile Phone Banking for Rural Banks & their Clients

RBAP signed an MOA with Globe (GXI) for Loan Payment using Gcash

BSP approved pilot of Text-A-Payment to selected rural banks

Autoloadmax retailers as Gcash outlets was launched

Study on Cost Savings conducted in selected rural banks on the use of G-Cash for loan payment





2004

-200

5










2004

-200

5 Some RBs started paying employees salaries or allowances with Gcash

M-commerce was used by local merchants

BSP approved Cash-in/Out (Text-A-Remittance) services for rural banks

BSP approved Text-A-Deposit service for rural banks

Strategic Planning was conducted with 5 pilot banks

Some RBs started paying employees salaries or allowances with Gcash





2006










2004

-200











2006 Salary disbursements (Text-A-Sweldo) expanded to other

businesses in the community

Text-A-Bill Payment was initiated by a rural bank with local utility cooperative

Text-A-Withdrawal was approved by BSP

Mobile Phone Banking Specialist Program was launched

Salary disbursements (Text-A-Sweldo) expanded to other businesses in the community




2007










2004

-200











2006 Salary disbursements (Text-A-Sweldo) expanded to other businesses

in the community








2007

Mobile phone banking specialist program generated more than 60,000 new users; more than 3,400 signed up as local merchants

Mobile Phone Marketing program launched

More than 40 rural banks with more than 400 branches are Gcash accredited outlets

RBAP and Globe (GXI) partnership renewed (Gcash)

RBAP signed an agreement with Nokia Philippines (Nokia phone financing and educational materials for mobile phone

RBAP Signed an agreement with Smart Communications (Smart Money)







2008










2004

-200











2006 Salary disbursements (Text-A-Sweldo) expanded to other businesses

in the community








2007













2008

BSP approved Smart Money Pilot in 2 Rural Banks in July.

55 Accredited Rural Banks with 830 branches and other banking offices

44% increase in M-Banking Transactions in 2009

Cumulative Mobile Banking Transactions via the GCASH platform exceed $100 million

BSP approved Smart Money Pilot in 2 Rural Banks in July.

55 Accredited Rural Banks with 830 branches and other banking offices

44% increase in M-Banking Transactions in 2009

Cumulative Mobile Banking Transactions via the GCASH platform exceed $100 million

2009

1st Valley Bank

Green Bank

GM Bank

PR Bank

Cantilan Bank

MPB Rural Banks

Practical Issues between Mobile Money Issuers and MFI partnerships

FlexibleResponsivenessMarketing SupportTraining

✔✔✔✔

Launch Services

– Customer

Adoption

Launch Services

– Customer

Adoption

Regulatory

IssuesRegulatory

Issues

Preparing Small Financial Institutions to Promote Mobile Money and Mobile

Financial Services

Customer

PerspectiveCustomer

Perspective

Product

DevelopmentProduct

Development

EnvironmentEnvironmentInstitutional

PerspectiveInstitutional

Perspective

Product

TestingProduct

Testing

The Business Model for Small Financial Institutions to offer and use Mobile Money:

Reduce Costs

Improving Outreach

EfficiencyIncrease Deposits

The Business Model for Small Financial Institutions to offer and use Mobile Money:

Reduce Interest rates on Micro Loans Clients (TAP)

Activate Mobile Money Resellers (Source of Mobile Money of TAP Clients)

Issues and Lessons Learnt from Pilot Tests

Understand your market

Importance of registration, training, and adoption of service by clients/merchants

Ecosystem Development – multiple sources and uses – m-banking/m-commerce

Understand your market

Importance of registration, training, and adoption of service by clients/merchants

Ecosystem Development – multiple sources and uses – m-banking/m-commerce

Acceptance and fear of the use of

technology especially

among elderly clients

Acceptance and fear of the use of

technology especially

among elderly clients


ConvenienceReduces transactionReduces risksIncreases sales

ConvenienceReduces transactionReduces risksIncreases sales

Value Proposition for Clients,

Merchants & Customers

Value Proposition for Clients,

Merchants & Customers


Lack of Mobile Money

Outlets or source

especially in the rural

areas

Lack of Mobile Money

Outlets or source

especially in the rural

areas

Effective training and educating Loan Officers and Front-line staff

Release of employee’s payroll or Allowances via mobile money

Plan for sufficient cash-in/cash-out points

Effective training and educating Loan Officers and Front-line staff

Release of employee’s payroll or Allowances via mobile money

Plan for sufficient cash-in/cash-out points


How to reach clients in remote

communities - awareness

and information

campaign

How to reach clients in remote

communities - awareness

and information

campaign

Information and Product Awareness Campaigns through media print, radio, TV, online

Mobile Phone Banking website http://mobilephonebanking.rbap.org

Promote Mobile Money by banks in key locations/events (such as local festivals)

Information and Product Awareness Campaigns through media print, radio, TV, online

Mobile Phone Banking website http://mobilephonebanking.rbap.org

Promote Mobile Money by banks in key locations/events (such as local festivals)

http://mobilephonebanking.rbap.org/

http://mobilephonebanking.rbap.org/


Increasing of volume and

usage of mobile

money in the rural areas

Increasing of volume and

usage of mobile

money in the rural areas

Incentive programs for accredited rural banks

Mobile Phone Banking conferences & workshop dialogue events

Incentive programs for accredited rural banks

Mobile Phone Banking conferences & workshop dialogue events


Working with MFIs –

Networks are key to

outreach

Working with MFIs –

Networks are key to

outreach

Creating a sense of ownership among bank partners

Regular Accreditation training

Rural Bankers Membership Meetings

Testimonials from accredited rural banks

Globe GCASH promotion

Creating a sense of ownership among bank partners

Regular Accreditation training

Rural Bankers Membership Meetings

Testimonials from accredited rural banks

Globe GCASH promotion

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

Larry Bat-ao, Cantilan Bank Merchant-Deposit and provider of GCASH

Bank partnered with Local Merchants to act as resellers of mobile money in rural areas.


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


Bank coordinates with GXI for AutoLoadMax Dealers to provide Cash-Out functions

Developing Mobile Money Ecosystems Commitment of Rural Bank Management

Development of Mobile Money EcosystemSufficient Cash-In/Cash-Out

Creating Awareness on Mobile Money in the Rural CommunityPromote the value proposition for businesses, clients, and customers

MMT Roadmap for Microfinance

Documents

Transcript of MMT Roadmap for Microfinance