The Evolving Filipino Microentrepreneur (Part 3 of 3)

MABS Luzon Regional Manager Jove Tapiador provides the final part of Marketing to the Filipino Microentrepreneur series. (Read Part 1 / Read Part 2)

In the RBAP-MABS Regional Roundtable Conference last November in Manila and Davao City, participants were provided with an overview of how to handle the changes in the evolving microenterprise market over the next five years. The roundtable focused on what to consider as rural bankers expand their microfinance operations in the Philippine countryside.

1. Tailor-fitted Products

MPB client jan2011In summary, the Filipino microentrepreneur is evolving and banks must evolve with them as well. Potential clients are asking rural banks to be more responsive to a full range of financial needs rather than standard group or regularly amortized microfinance loans. They are asking for more options and tailor-fitted loan products attuned to their cashflow. They are also looking for simple, interest-bearing and hassle-free voluntary savings deposit accounts with low or no maintaining balance. From the usual damayan or peer-based informal insurance protection, micro-entrepreneurs are asking for formal insurance products to cover death, illness, and disability with fast and simple claims processing procedures. They are asking for services that allow more flexibility so they can pay loans or deposit cash at their own convenience instead of defined collection times and schedules. They are becoming more interested in branchless banking options such as receiving loans or withdrawing money from an ATM or via mobile money.  They are also interested in instant communication and updates about the status of their loan application, deposit balance, loan amortization reminders or confirmations, and information on new products via SMS or call centers.

2. Rural Banks as Partners

Analysts predict that microentrepreneurs will soon be seeking rural banks that are more engaged and supportive. They would want to see rural bankers who sincerely care about their business and family needs. They want to feel that rural banks act as partners that provide reliable and dependable services during good and bad times. They want to taste more freedom in how to address their financial security by becoming educated on the advantages and uses of a wider array of financial products and services that meet their increasingly mobile life style.

3. Timely and Transparent Services
To this end, rural banks must deliver consistent and timely service through transparent lending and savings policies and procedures. Rural banks must provide accurate and standardized disclosure statements and be able to respond to customer complaints quickly and efficiently.  There should be no hidden charges and banks should also re-evaluate compulsory charges and fees. Clients need and expect quicker turn around on loan processing and insurance claims with banks providing services within days and not weeks. Status and informational updates on loan applications or insurance claims should be available via SMS or a call center. When natural calamities strike, rural banks should be able to handle savings withdrawals in a timely manner. Rural banks must adapt to a fluid situation to show they are genuine kababayans or neighbors.
In summary, as the microenterprise market transforms and clients evolve, rural banks need to adapt and provide tailor-fitted products that meet the different client needs through improved market segmentation strategies.  Rural bankers should capitalize on their unique long standing presence in their communities to demonstrate that the banks know the needs of their local communities. They must show that they will be there to continue to provide services from birth to death for the entire family. Lastly, with clients becoming more mobile, keeping clients up-to-date and able to receive financial services where they are and when they need it is becoming more essential then ever before.  Rural bankers should therefore take advantage of new regulations on microfinance-oriented banking offices (MBOs), third-party ATM options, mobile phone banking services, and SMS platforms that allow the banks to stay in touch and provide services to clients wherever and whenever they need them.

3. Timely and Transparent Services

To this end, rural banks must deliver consistent and timely service through transparent lending and savings policies and procedures. Rural banks must provide accurate and standardized disclosure statements and be able to respond to customer complaints quickly and efficiently.  There should be no hidden charges and banks should also re-evaluate compulsory charges and fees. Clients need and expect quicker turn around on loan processing and insurance claims with banks providing services within days and not weeks. Status and informational updates on loan applications or insurance claims should be available via SMS or a call center. When natural calamities strike, rural banks should be able to handle savings withdrawals in a timely manner. Rural banks must adapt to a fluid situation to show they are genuine kababayans or neighbors.

In summary, as the microenterprise market transforms and clients evolve, rural banks need to adapt and provide tailor-fitted products that meet the different client needs through improved market segmentation strategies.  Rural bankers should capitalize on their unique long standing presence in their communities to demonstrate that the banks know the needs of their local communities. They must show that they will be there to continue to provide services from birth to death for the entire family. Lastly, with clients becoming more mobile, keeping clients up-to-date and able to receive financial services where they are and when they need it is becoming more essential then ever before.  Rural bankers should therefore take advantage of new regulations on microfinance-oriented banking offices (MBOs), third-party ATM options, mobile phone banking services, and SMS platforms that allow the banks to stay in touch and provide services to clients wherever and whenever they need them.