110 banks apply for micro offices
OVER 100 banks have applied to establish micro-banking offices (MBOs) in
areas where there were no banks or only a few banks, according to the
Bangko Sentral ng Pilipinas (BSP).
"As of end-2011, the BSP received applications from 110 banks covering
over 720 MBOs," Pia Bernadette Roman-Tayag, BSP head for financial
inclusion, said in an e-mail on Monday.
Almost all the applications were approved and only a few were denied,
she added, declining to cite specific figures.
The latest number of banks was an increase from the 97 that lodged
applications as of end-June last year.
Ms. Tayag said the banks' positive response to Circular 694 issued in
October 2010 gave the central bank hope that the hundreds of
municipalities still without banks up to now would finally get access to
financial services.
The BSP issued Circular 694 to allow banks to establish MBOs or
microfinance-oriented other banking offices (MFOs).
"Other banking offices" or OBOs are permitted to do only
non-transactional banking functions such as marketing, accepting of loan
applications or hosting of automated teller machines.
MBOs or MFOs, on the other hand, are allowed to do more such as such as
accept micro-deposits; service withdrawals; disburse micro-loans and
collect payments; market, sell and service microinsurance products;
receive and pay out remittances; and act as cash-in, cash-out agents of
electronic money transactions.
The circular was meant to encourage banks to expand -- paticularly to
unserved or underserved areas -- without shelling out the large sums
they usually do for branches.
"With the relatively lower cost to set up, MBOs provide an opportunity
for banks to set up offices in areas that may otherwise not be
immediately economically feasible to set up an office," Ms. Tayag explained.
"This therefore provides scope for banks to reach out to hard-to-reach
or even unbanked areas," she added.
Two municipalities -- one in Ilocos Sur and another in Maguindanao --
would get their first bank offices soon, thanks to MBOs that would be
set up there, she noted.
Ms. Tayag said most of the banks' applications were for MBOs or the
conversion of OBOs into MBOs. Some were for the retention of MBOs and
conversion of OBOs into extension offices
"[T]here are 65 municipalities in the country that are serviced only by
MBOs," she said.
"This is a significant first step to address the problem of lack of
financial access where around 600 of our country's 1,634 municipalities
have no banking offices."
Results of the BSP's first Consumer Finance Survey showed that eight out
of 10 households did not have a deposit account.
The data pointed out the need for the BSP to continue working towards a
more inclusive financial system by issuing policies and educating the
public. -- Kathleen A. Martin
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CARLOS ANI - International Microfinance Consultant - SEEDFINANCE Corporation Chairman
Mailing address: PO Box 90 UPLB Los Banos Laguna, Philippines 4031
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