SIMM project provides clear reception to mobile banking
Published on 18 October 2012 Hits: 186
Mobile banking—regarded as the great equalizer for rural banks as it
helps bridge the banking divide, especially for the traditionally
unbanked segment of the market in the countryside—increases its signal
anew by a few bars with another initiative from the United States Agency
for International Development (Usaid).
Fresh from capping off its 15-year partnership with the Rural Bankers
Association of the Philippines via the Microenterprise Access to Banking
Services (MABS) program, Usaid this time has introduced a project titled
Scaling Innovations in Mobile Money or SIMM. It is a two-year
undertaking that aims to train more than 10,000 people through financial
education and literacy on the uses of mobile money and mobile money
services for improved household financial management; provide 10,000
people with new savings accounts via mobile banking; establish an
additional 2,500 cash-in/cash-out merchant partners by focusing on rural
areas; increase payroll implementation and adoption to 100 small,
medium, and large businesses and one Philippine government agency or
local government unit; increase the volume of mobile money transactions
by over 200 percent; and sponsor conferences and venues for networking
support and produce research papers and assessments for knowledge sharing.
Usaid has partnered with BPI Globe BanKO, Smart Communications and Globe
Telecom for the SIMM project, which are incidentally the three mobile
money service providers in the country.
According to Maura O'Neill, Usaid chief innovation officer and senior
counselor to the administrator, SIMM builds upon Usaid's and the
Philippines' current interventions in microfinance and mobile banking to
expand financial services even further through new technologies, as it
will enable Filipinos even from the remotest parts of the country to
send money home, save money, pay for unexpected medical costs, school
fees, or invest in their business using their mobile phones.
The SIMM Project aspires to integrate developing communities into the
formal financial sector, thereby providing low income Filipinos with the
means to build assets and participate more broadly in the formal economy.
On the part of rural banks, this project further complements the
industry's existing program to reach out and extend its services to its
target market through the use of mobile phones. Rural banks are no
strangers to the prowess of mobile telephony in delivering banking
services to the countryside by effectively transcending physical and
geographical boundaries. Rural banks are well positioned to be the
mobile money enabler in the countryside.
Taking a page from an earlier presentation of John Owens, previously the
chief of party of MABS, mobile banking transactions will continue to
expand and be easier to develop by rural banks as new applications for
mobile phones are continuously introduced. Services like text-based
banking, Point of Sale systems, cash cards, ATM cards, and prepaid debit
cards are technologies that are now within easy reach of rural banks.
While bigger banks have been investing in the expansion of their ATMs,
most rural banks prefer to collaborate with third party ATM providers
like ENCASH and offer a GCash- or Smart Money-enabled ATM card services
for a better round-the-clock access on the part of clients and customers.
Recent regulations and circulars issued by the Bangko Sentral ng
Pilipinas (BSP) have also enabled a regulatory environment that promotes
greater financial inclusion, or the delivery of financial services to
low-income groups at affordable costs. Among these important policies
include the easing of bank branching requirements and the expansion of
the role of micro-banking offices.
Under BSP Circular No. 694, the range of microfinance services that
banks can offer are expanded, now including the disbursement and
collection of microfinance loans, acceptance of micro-deposits, payout
remittances, the provision for cash-in and cash-out mobile money
services, sale and support of microinsurance services, bill payments,
and government services, among others. The BSP has also broadened the
classification of microfinance clients who could be offered
microinsurance services to now include customers from low-income households.
In 2011, rural banks processed more than P4.9 billion in mobile
money-enabled banking transactions. For the first four months of 2012,
there is already a 58-percent increase in the volume of transactions
anchored on mobile banking.
Over 73 rural banks with 1,168 branches and other banking offices have
now been accredited to offer mobile money-enabled banking services in
the country. These banks have processed more than P16 billion in mobile
banking transactions since 2006.
Although these numbers are already quite impressive, there is still a
lot of work that needs to be done. The BSP said that as of last year,
only 26 percent of Filipinos have access to formal financial services.
On the other hand, out of the 1,635 municipalities in the country, 37
percent or 610 municipalities still do not have access to banks.
Rural banks can help bridge this gap through the use of mobile banking.
Meanwhile, the SIMM Project will serve as another stimulus for the
continued development and promotion of mobile banking in the country.
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CARLOS ANI - International Microfinance Consultant - SEEDFINANCE Corporation Chairman
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