Big banks expanding to world’s poorest

Big banks expanding to world's poorest

LONDON -- When the Afghan government used mobile phones instead of cash
to pay some of its policemen, the officers thought they'd just had a 30%
pay rise. In truth, they had just been paid the full amount, with
nothing skimmed off by middlemen, for the first time.

A vendor displays his wares in a market in Mozambique. With the use of
technology, banks have been reaching out to the poor to give them access
to financial services. -- Reuters

This anecdote from the US Agency for International Development shows how
technological innovations such as mobile banking and biometrics have
helped integrate more people in emerging markets into the formal
financial system, opening up opportunities for banks willing to take a
chance.

While the market for more affluent and business clients becomes
saturated, providing the world's poorest with access to financial
products is an unmatched growth opportunity.

Half the world's adults, over 2.5 billion people, do not have a formal
bank account, according to the World Bank. In low-income economies, it
can be less than a quarter.

Many developing countries also offer banks the allure of a growing
working-age population and an emerging middle class.

"Twenty years ago, we spoke about the poor with a sense of futility, and
I think now when you talk about the base of the pyramid, more often than
not you're talking about markets and opportunities," said Michael
Schlein, chief executive of Accion, a non-profit organisation that
invests in microfinance institutions.

Between 2010 and 2020, the world's poorest 40% will nearly double their
spending power to $5.8 trillion from $3 trillion, according to Accion's
Center for Financial Inclusion.

The idea of providing the world's poorest with small loans was pioneered
30 years ago by Nobel Peace Prize winner Mohammad Yunus and Grameen Bank
in Bangladesh. Microfinance grew into a global industry with a loan
portfolio of $78 billion in 2011, according to data provider MIX Market.

Big banks, which suffered more than a little reputational damage of
their own during the crisis, realized they needed to go beyond
branch-based models to profitably reach such customers in a market
traditionally reliant on cash.

"The competition and the saturation in those (developed) markets are
getting higher and higher, so they have to look for the next wave, the
next area of possible profitable ventures," said Gerhard Coetzee, a
specialist at the Consultative Group to Assist the Poor, a think-tank at
the World Bank.

Citigroup launched a mobile payments scheme called Mobile Collect for
small stores in the Dominican Republic earlier this year, while
MasterCard teamed up with the Nigerian government in May to roll out 13
million national identity cards that double as electronic payment cards.

COMPETE OR COLLABORATE
Tapping the potential in the market of the unbanked requires alternative
business models.

Fragmentation makes it harder to achieve economies of scale, and banks
also have to overcome the hurdles of poor communications infrastructure
and the often non-existent credit history of many potential customers.

"Many banks think of the digitization opportunity around the world.
There is, however, a constraint, which is the whole issue of
infrastructure," Aigboje Aig-Imoukhuede, chief executive of Nigeria's
Access Bank, told a recent conference.

Another issue is competition. Banks' biggest rivals are not their peers
but rather mobile network operators and large retailers. Mr. Coetzee
says they face a difficult balancing act of rolling out competing
products and collaborating to serve a bigger chunk of the market.

Banks also need mobile network operators to allow their payment systems
to work across rivals' systems -- a commonplace in developed banking
markets -- if they are to achieve scale.

M-Pesa, Safaricom's successful mobile payment system in Kenya, benefited
from the telco's hefty market share to roll out its service, so it had
an in-built advantage. But that doesn't apply everywhere, Mr. Schlein said.

Bob Annibale, Global Director of Community Development and Microfinance
at Citigroup, also highlighted the importance of integrating different
payment systems.

"It is about that financial architecture... The bank payment system also
connects to the mobile payments system. If that becomes the norm, it's a
lot easier for us."

But getting competitors to collaborate is not easy.

"If you're waiting for the industry to come together and collaborate,
it's like asking the turkeys to vote for Christmas," a participant said
at the conference.

Clearing such obstacles could unlock huge rewards.

Barclays, which teamed up with NGOs Care International and Plan UK to
form the Banking on Change partnership, connecting village savings
groups with the formal financial system, estimated that $145 billion --
about a quarter of the Nigerian economy -- could be injected into the
global economy each year if all 2.5 billion of the unbanked were
included in the scheme. -- Reuters

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Metrobank is lone global recipient of The Banker’s Financial Inclusion Award

Metrobank is lone global recipient of The Banker's Financial Inclusion Award

(The Philippine Star) | Updated December 15, 2013 - 12:00am

MANILA, Philippines - The Metropolitan Bank & Trust Company, through its
corporate social responsibility arm, the Metrobank Foundation Inc., was
awarded the Financial Inclusion Award by The Banker, the world's premier
banking and finance resource monthly magazine based in the United
Kingdom and read in over 180 countries, during the 2013 Bank of the Year
Awards held last Nov. 28 at the Intercontinental Park Lane Hotel in London.

The Financial Inclusion Award given by an international financial
affairs publication owned by The Financial Times Ltd. pays tribute to
the cream of the crop of global banking.

As the lone global Financial Inclusion awardee, Metrobank was
distinguished for its support to the Back-to-Back Financial Education
and Microfinance for overseas Filipino workers (OFW) in Singapore and
their families in the Philippines.

In partnership with Alalay sa Kaunlaran Inc. (ASKI) Philippines, one of
the country's largest microfinance institutions and its subsidiary, ASKI
Global Ltd., the program provides training on financial education and
basic entrepreneurship to OFWs in Singapore and their respective family
members in the Philippines to help create financial stability.

"We are honored to be this year's recipient of The Banker's Financial
Inclusion Award. Beyond the prestige, for us, it is an affirmation of
the work that we are doing for the low-income OFW sector and their
families. Receiving this award extends to the future of the children of
these OFWs because it brings opportunity of income sustainability
through the microfinance funds made available for the establishment or
expansion of micro enterprises," said Metrobank Foundation president
Aniceto Sobrepeña.

"It gives added hope that the OFWs and their families would have to help
each other improve their lives together in their own homes, without
having the OFW family member leave the country to earn a living. The
award will keep inspiring the economic growth in the localities of these
OFW families, because as businesses are established, doors of employment
are opened," Sobrepeña said.

"The prestigious award did not just recognize Metrobank and the
Metrobank Foundation, but the hundreds of thousands of Filipino workers
in Singapore, and the millions of them in world, and their families back
home," he added.

During Metrobank's 50th anniversary celebration last year, the bank
heightened its support to the OFW program of ASKI by extending a
P12-million grant to the program from a previous grant worth P250,000 in
2011.

Dubbed as the MetroGold Financial Education Program and for Migrant
Workers and MetroGold for Migrant Workers, an amount of P2 million and
P10 million were allocated for these two programs, respectively. Before
graduates will be able to avail themselves of a loan, they have to
present business cases of the kind of enterprise that they intend to
establish.

As a result of the support in 2011, 90 percent have increased their
monthly savings by at least 10 percent. All students have submitted
business plans that will enable them to establish business in the
Philippines using the remittances or through applying for a microfinance
loan.

So far, for the MetroGold microfinance program, over P4 million worth of
loan applications have been processed. Most business loans are for
farming, small-scale groceries and restaurants, and Internet cafés.

In Singapore, a total of 322 MetroGold OFW scholars have graduated upon
completion of the Financial Education and Basic Entrepreneurship
courses, with an addition of new modules on Personality Development.

Philippine Ambassador to Singapore Minda Cruz graced the graduation last
Dec. 1 as guest of honor. Special awards were also given to outstanding
graduates such as the Outstanding Basic Entrepreneurship Award,
Outstanding Financial Student Award in Savings and Investment
categories, and the Leadership Award.

In the Philippines, some 150 family members were trained in financial
education in Iloilo and Pangasinan as well as in the National Capital
Region.

The Banker's Financial Inclusion Award was received by Metrobank region
head for Europe Walter Lim from The Banker editor Brian Caplen and BBC
journalist Michael Duncan Buerk.

To date, The Banker's Financial Inclusion Award is the third
international award won for Metrobank by the Metrobank Foundation.
Metrobank bagged the Asian Banking Award for Social Responsibility by
the Asian Bankers Association and the Association of Development
Financing Institutions in Asia and the Pacific, and the Best Corporate
Social Responsibility Program by the Asian Banking and Finance Magazine
in 1999 and 2007, respectively.

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CARD Microfinance institution expands to Mindanao

CARD Microfinance institution expands to Mindanao

Posted by: TYRONE A. VELEZ Posted date: December 12, 2013
by TYRONE A. VELEZ

Davao Today

DAVAO CITY – A Luzon-based rural development institution for women
expanded its reach to Mindanao through its micro-bank operations and
other services.

The Center for Agriculture and Rural Development Mutually Reinforcing
Institution (CARD-MRI), based in San Pablo City, Laguna, will open three
to five micro-banking offices in Mindanao by next year, including
Malalag and Malita in Davao del Sur and Tagum City.

On Friday, CARD MRI opened its CARD Bank branch along Ariel Street in
GSIS Heights along Matina here.

In a press conference here on Friday, CARD MRI President Dolores Torres
said the institution is expanding its services to Mindanao to support
livelihood of women in rural areas through micro-financing, education,
insurance and other economic and social services.

Microfinance is a financial service commonly in the form of extending
soft loans to poor and low-income families and aims to provide means for
the poor to strive for economic upliftment.

Torres said CARD banks provide loans as low as P5,000 to start a small
and micro-business with 2% monthly interest and zero collateral.

CARD's thrust of supporting women began in 1986 with a fund for the
livelihood of women in Laguna.

"We started with a fund that helped provide P1,000 in loan for jobless
women, and offered them that this would be payable in a year," said Torres.

She attributed the warm reception of women to the beneficiaries' trust
on them, citing that CARD's philosophy that they are "stewards of people".

She said they started at a time when other credit groups, including from
government, were going down.

CARD-MRI established its first rural bank in 1997, and from around 30
women it supported in 1986, the micro-finance institute now serves one
million members in 55 branches in more than 40 provinces. There are
13,833 members in Davao.

Torres said that while their clients are primarily women, as part of
their thrust in empowering this sector, they are also open to male
clients who show entrepreneurial potential.

She said they are not afraid of the cases of small banks folding up,
saying that that they have "99.5% repayment on loans, and 0.5% are only
delayed payments."

CARD-MRI has also established a Business Development Service Foundation
Inc. in 2001 to support its micro-entrepreneur clients through marketing
and business development services.

One of its thrust includes promotion of its advocacies. It includes the
recent fashion show dubbed "Galing ni Inay" (Mothers' Best), showcasing
local products such as indigenous weavings, leather, paper and wood from
artisans and rural women workers.

The fashion show also featured clothes and accessories designed by
Laguna-based designer Cris Gamo utilizing indigenous materials such as
piña cocoon from Lumban, Laguna, tiger grass from Albay, Bicol, T'nalak
from Lake Sebu, South Cotabato, and handwoven cloth from Mountain Province.

CARD-BDSFI President Aristeo Dequito said the products even made it to
the World Bazaar October.

The designs can also be seen in CARD's outlet in Abreeza Mall Davao.

Another BDSFI service is the "Hapinoy" for sari-sari store owners, a
program done in partnership with NCCC Mall Davao and Ace Enterprises
Cotabato. It engages in agriculture enterprise development as well in
renewable energy projects.

CARD-MRI also conducts free medical consultation in their clinic along
Magallanes, and provides medical and education support services to clients.

Microfinance has been thriving in the country, according to a report
from the Economist Intelligence Unit in 2012. The EIU ranked the
Philippines 4th out of 55 countries, and is one of three Asian countries
in the top ten.

It added that the Bangko Sentral ng Pilipinas' (BSP) has adapted
microfinance as a policy to help reduce the incidence of poverty.

The Asian Development Bank also cited potential for the country's
microfinance after evaluating the Country's Microfinance Development
Program in 2008 where microfinance clients increased to 5.5 million in
2006 and created 2.6 million jobs. (Tyrone A. Velez, davaotoday.com)




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WFP partners with DSWD to increase CCT assistance

WFP partners with DSWD to increase CCT assistance

By Pia Lee-Brago and Rainier Allan Ronda (The Philippine Star)
December 13, 2013 - 12:00am

MANILA, Philippines - The World Food Program (WFP) has partnered with
the Department of Social Welfare and Development (DSWD) to provide P260
million in additional cash assistance to 500,000 beneficiaries of the
conditional cash transfer (CCT) program who were affected by Typhoon
Yolanda.

WFP Philippines country director Praveen Agrawal and Social Welfare
Secretary Corazon Soliman on Wednesday signed a memorandum of
understanding for the cash distributions to CCT beneficiaries in 50
typhoon-hit municipalities in Leyte and Samar.

The cash grant will benefit around 100,000 families.

Each family will receive an emergency cash grant of P1,300 in addition
to their CCT cash grants for December and January. Each family will also
receive a month's supply of rice.

The most food insecure families were identified in WFP's post-Typhoon
Yolanda assessment among vulnerable families enrolled under the CCT program.

"We need to provide the right kind of assistance as circumstances change
and at this point in time, our assessments indicate that a combination
of cash support and in-kind rice is an effective approach," Agrawal said.

Soliman, for her part, said DSWD's partnership with the WFP is another
proof that during times of adversity, the CCT program becomes a good
avenue for humanitarian aid to reach its intended recipients.

"The local economy plays an important role in this recovery and in order
to put it back on track, the people need money that they can use to
purchase goods – goods that they need in order to survive," Soliman added.

The provision of cash support through the CCT program marks a step in
the strategic evolution of assistance provided by the WFP.

To date, the WFP has distributed nearly 6,000 metric tons of rice, 190
MT of high-energy biscuits and two MT of nutritional products for
children to three million people, in partnership with the DSWD and
non-government organizations. With Jaime Laude, Christina Mendez, Alexis
Romero, Artemio Dumlao

- See more at:
http://www.philstar.com/headlines/2013/12/13/1267587/wfp-partners-dswd-increase-cct-assistance#sthash.rfRaiBSi.dpuf



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UN unit lauds SB Corp microfinance program

UN unit lauds SB Corp microfinance program

(The Philippine Star) | Updated December 10, 2013 - 12:00am

MANILA, Philippines - The International Fund for Agriculture Development
of the United Nations (UN-IFAD) has rated the Rural Micro-Enterprise
Promotion Program (RUMEPP) as "satisfactory."

The program is being implemented by the SB Corp., a line agency of the
Department of Trade and Industry (DTI).

The UN-IFAD funded the program through special drawing rights (SDR) for
a $12.35-million soft loan and another $340,000 grant in 2005.

The program should be completed this year.

The rural development goal is designed to increase economic development
and improve job generation resulting in reduced rural poverty among
200,000 poor rural households.

The program has three major components: microfinance credit services,
micro-enterprise promotion and development and program and policy
coordination.

The microfinance credit services component has a national coverage and
covers all rural areas of the country, while the micro-enterprise
promotion component focused on 19 provinces in five regions namely CAR,
CARAGA, Regions V, VII and XII.

Performance of the microfinance credit services component remains
satisfactory as $14.4 million of the IFAD loan allocated for lending is
expected to be fully utilized by end of 2013.

In terms of outcome, the target for new micro-enterprise borrowers was
met with 56,875 micro-entrepreneurs (MEs) provided with loans from 89
microfinance institutions (MFIs) compared with the original targets of
35,000 MEs and 75 MFIs, an achievement of 156 percent and 119 percent,
respectively.

The micro-enterprise promotion and development component has also
exceeded its targets as a total of 33,873 MEs received business
development services (BDS) and 13,587 MEs were served through 19 MSME
centers.

Based on a survey, 78 percent of the MEs served reported an average
increase in sales of 82 percent as compared to the five percent target.

The convergence target of 15,000 MEs was also achieved as 15,252 MEs
were provided with both BDS and credit services.

For the program and policy coordination component, the mission found
some MFI partners.

The People's Bank of Caraga has adopted a twin approach of providing
credit and BDS to MEs at the same time.

The Cantilan Bank in Surigao del Sur adjusted their loan portfolios to
cater to the needs of the seaweed producers in Surigao del Sur hit by
typhoon "Pablo."

The BIBAK Multi-Purpose Cooperative in Kalinga has adjusted its
operations to provide credit services for BDS beneficiaries of the
program in Kalinga who were unable to access funds during the first four
years of program implementation because there were no SB Corp accredited
MFIs in the area.


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