How Mobile Money Can be

Used to Support Microfinance:

M-Commerce World Summit 2010

March 17-18, 2010
Shangri-La, Singapore
 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.
 Mobile Phone Banking
Penetration
• Very rapid expansion over the last 10 years
• More than 50% of Filipinos are mobile phone subscribers

Mobile Phone
Mobile Phone
Subscribers Mobile Phone
Subscribers vs.
(World Subscribers
Bank Accts
Projections) (Philippines)
(Philippines)
2008 (ITU): >>6860% penetration
million 1998
rate
subscribers 1998
2009 (ITU):
4 Billion Bank
Bank Acct:
Acct: >
> 23
23 M
M
>> 70 million76 M
Projections Mobile
4 Billion
2040 (World subscribers
(2010) Mphone: > 1.7 M M
sub: > 1.7
2012 (GSMA):
Bank): > Projections 76 M
2009:
(2010) 2008:
65Billion
Billion Bank
Bank Acct:
Acct: >
> 32
32 M
M
Mobile
Mphone: > 68 M M
sub: > 70
 Opportunities for Mobile
Phone Banking via Rural
Banks
Mobile Phone Remittance
Rural Banks
Industry Business
> 50% of population is
located in the rural
Subscriber base is Growing ($17 B in
areas
growing rapidly. 2009 & expected to
grow to $18 B in
Rural banks have 2,500
Stiff competition 2010)
branches & other
among telcos is
banking offices in rural
bringing costs of Domestic remittances
areas
service down are also a key market
(unlimited text,
> 6 million deposit
rebates, promos.) Transactions and
accounts
transfer methods now
1.5 million borrowers
Mobile Phone Cost is increasingly using E-
getting cheaper. Money (GCASH/Smart
Motivated as an
Money)
industry to grow to
scale
 Breakthroughs & Milestones:
Mobile Phone Banking for Rural Bank & their
Clients
BSP
Mobile approved
phone Smart
banking Money
specialist Pilot in 2
program
RBAP signed an Rural
MOA
generated Banks
with
more in July.
Globe
than (GXI) new
60,000 for Loan
users; more
than
Payment using 3,400 signed up as local merchants
Gcash
Some
2007 RBs started
Salary paying employees
disbursements salaries
(Text-A-Sweldo) or
expanded
2004-

55 Accredited Rural Banks with 830

2005
2006

2008

2009
allowances with
to other Gcash
businesses
Mobile in the
Phone Marketing
branches and community
program
other launched
banking offices
BSP approved pilot of Text-A-Payment to selected
rural banks
M-commerce
Morewas
than
Text-A-Bill used
40
Payment
44% by
rural
was
increase local
banks merchants
with more
ininitiated than 400
by aTransactions
M-Banking rural bank
with branches
local in arecooperative
utility
2009 Gcash accredited outlets
BSP approved
Autoloadmax Cash-in/Out
retailers (Text-A-Remittance)
as Gcash outlets was launched
services for
RBAPrural
andbanks
Text-A-Withdrawal Globewas
Cumulative (GXI) partnership
approved
Mobile renewed
by BSP
Banking
(Gcash)
Transactions via the GCASH platform
BSP approved Text-A-Deposit service Program
for rural banks
Study on Mobile Phone
CostRBAP
Savings Banking
exceed $100 Specialist
million
signed an agreement with Nokiarural
conducted in selected was
on launched
banksStrategic
the Philippines
use of G-Cash
Planning (Nokia
was for loanfinancing
phone
conducted payment
with and banks
5 pilot
educational materials for mobile phone

RBAP Signed an agreement with Smart

Communications (Smart Money)
 Mobile Phone is more than just a
Phone…

With Mobile
Phone, you
can now…

Microenterprise Access to Banking Services Program

www.rbapmabs.org
Mobile Phone Banking
Accredited Rural Banks

 61
accredited
Rural Banks
 886
branches &
other
banking
offices
 Nationwide
coverage
 Preparing Rural Banks & MFIs to
Promote Mobile Money and Mobile
Financial Services
Launch
–
Services
r
Product Custome
Develop
m Adoption
r ry
Custome Regulato ent
Perspect
iv Issues na Product
e Institutio Testing
l
iv
Environ
me Perspect
nt e
The Business Model for Rural
Banks to offer and use Mobile
Money:
sts
Co
e
u c
d
Re
r e a t er
G y
c ie n c
E ffi
Improving Outrea
ch
Incre
ase
Depo
sits
Reducing Costs:
Text-A-Payment
Transactions
drastically reduce
costs of field based
transactions

Green Bank reduced

effective interest
rates by more than
25% for Micro Loans
Clients paying via
Mobile Money
Greater Efficiency:

Banks are able to

serve more Clients

Reduce Transaction
Costs

GM Bank able to use

GCASH to offer
deposits/withdrawal
Improving Outreach:

Reaching remote
areas with banking
services via mobile
money

Cantilan Bank
serving clients in
remote areas via
mobile phone
Increase Deposits:

Payroll servicing via

mobile money has
allowed rural banks to
dramatically increase
deposits

PR Bank increased deposits

by more than PhP 10
million serving one large
company in a rural area
Issues and Lessons Learnt from
Understand your
Pilot Tests
market

Acceptanc Importance of
e and fear registration,
of the use training, and
of adoption of service
technology by
especially clients/merchants
among
elderly Ecosystem
clients Development –
multiple sources
and uses – m-
Issues and Lessons Learnt from
Pilot Tests

Convenience
Value
Proposition
Reduces
for Clients, transaction
Merchants Reduces risks
& Increases
Customers sales
Issues and Lessons Learnt from
Pilot Tests
Effective training and
Lack of educating Loan
Mobile Officers and Front-
Money line staff
Outlets or
source Release of
especially employee’s payroll/
in the allowances via
rural mobile money
areas
Plan for sufficient
cash-in/cash-out
points
Issues and Lessons Learnt from
Pilot Tests
How to Information and Product
reach Awareness Campaigns through
clients in media print, radio, TV, online
remote
Mobile Phone Banking website
communit http://mobilephonebanking.rbap.
ies -
awarenes 64 videos on YouTube
s and http://www.youtube.com/rbapma
informati
on
Promote Mobile Money by
campaign banks in key locations/events
(such as local festivals)
Issues and Lessons Learnt from
Incentive
Pilot Tests programs for
Rural Banks
Increasin
g of Mobile
volume Phone
and Banking
usage of conferences
mobile & workshop
money in dialogue
the rural events
areas
Rural Bank
Marketers
Issues and Lessons Learnt from
Pilot Tests a sense of
Creating
ownership among bank
Working partners
with
Rural Regular Accreditation
Banks – training
Networks
are key Rural Bankers Membership
to Meetings
outreach
Testimonials from
accredited rural banks
 Overcoming Cash-in/Cash-out
Constraints in Rural Community

Bank partnered
with Local
Merchants to act
as E-Money
Resellers in rural
communities

Larry Bat-ao, Cantilan Bank

Merchant-Deposit and provider of
GCASH
 Partner Merchants as E-Money
Resellers
E-Money Reseller is a
retail outlet or merchant
accredited by the Bank &
GXI

E-Money Resellers
facilitate cash-in & cash-
out and are not direct
banking agents
 Requirements in Selecting
E-Money Resellers
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
transaction rate
 Know-Your-Customer (KYC)
Challenge
Challenge:
Sample ID/ATM card
 Need to simplify KYC in rural
areas
Proposed Solutions:
 Standardized ID/ATM Card that
will be issued by the rural
banks in partnership with GXI
 This ID/ATM Card will be
presented to E-Money Reseller
for every financial transaction.
 ID Card may also be used for
discounts, perks, promos,
loyalty, etc.
 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
Ecosystem Development

Rural
Bank
 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 in the Rural Community
Promote the value proposition for businesses, clients, and customers