Mobile banking expands to include microfinance
By Ronnel W. Domingo
Philippine Daily Inquirer
12:35 am | Monday, November 12th, 2012
MANILA, Philippines—Mobile banking in the Philippines is expanding into
microfinance to serve the lower-income market outside of the country's
major urban centers.
Tricia Dizon, head of financial services at Smart Communications, said
in a statement the telecommunications giant was helping launch mBank
Philippines.
This planned mobile micronfinancing service provider is meant to deliver
savings and loan products exclusively on a mobile platform to Filipinos
with little or no access to the formal banking system.
Regarding this effort, Dizon said Smart was working with PLDT-Smart
Foundation, mobile microfinance holding company mBank Holding, Finnish
development finance company Finnfund and Dutch development bank FMO.
Dizon said pilot services were already being offered through mCompany, a
nongovernment organization whose operations will spin off into mBank
Philippines once regulators approve its application for a formal banking
license.
"Seven out of 10 Filipinos do not have an account at a formal financial
institution mainly because of steep deposit requirements and the absence
of banks in remote areas, but almost all Filipinos have a mobile phone,"
Dizon said.
"By offering simple and effective financial services, mCompany—and
eventually mBank—seeks to increase financial inclusion and ensure that
people have enough money at any given moment," she added.
Dizon explained that once mBank is launched, Smart and Talk 'N Text
subscribers will be able to open a savings account with the help of
mBank field agents deployed in their communities.
Activated account holders can apply for a loan product that interests
them, immediately get a response about their application, and select a
weekly repayment schedule—all through their mobile phone.
"The process eliminates the need to travel far to deposit and withdraw
money, apply for loans, and pay amortization," Dizon said. "This is very
convenient especially for those who cannot afford to be absent from work
or leave their sari-sari stores."
Further, mBank will operate a credit risk management capability
delivered by Experian, which provides credit risk management automation
services.
According to the Asian Development Bank, the Philippines is one of the
more developed microfinance markets in the world.
An ADB study titled "Microfinance Development Strategy 2000" showed that
six countries including the Philippines account for about a third of the
world's global microfinance portfolio. The other five are Cambodia,
Pakistan, Papua New Guinea,
Uzbekistan and Vietnam.
The study also showed that as of 2010, there were 45 microfinance
institutions in the Philippines, accounting for $920 million in total
assets and a gross loan portfolio of $632 million that covers some 3
million active borrowers.
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CARLOS ANI - International Microfinance Consultant - SEEDFINANCE Corporation Chairman
Mailing address: PO Box 90 UPLB Los Banos Laguna, Philippines 4031
Emails: carlosani@gmail.com , carlosani@seedfinance.net
Landline Phone: +63495010127 (PLDT)
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http://phildevfinance.blogspot.com
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