“New Developments & Future Directions in Microfinance” shared with Mindanao Rural Bankers

31st Mindanao Rural Bankers Annual Conference

The United States Agency for International Development supported-Rural Bankers Association of the Philippines-Microenterprise Access to Banking Services (RBAP-MABS) program shared new developments and future directions in the microfinance field for rural bankers attending the 31st Mindanao Rural Bankers’ Annual Conference on October 6-7, 2011 at Naomi’s Botantical Garden & Tourist Inn, Ozamiz City.

The presentation highlighted the various new developments in the microfinance field that rural bankers need to be aware including the importance of dealing with competition and better understanding current market conditions.

Balance Products & Markets
Banks need to analyze their markets as well as their products to expand services by mixing and matching existing, modified and new products to meet the needs of existing and new markets. Rural banks need to continuously monitor developments in the market as well to better understand the needs of their market niche including focusing on not only their traditional clients such as rural households, micro and small businesses, farmers, fisherman, employees, teachers and local government workers but also new market niches including utility and other bill payment services, remittances, and services for out-of-town workers.  In the area of products and services, rural banks engaged in microfinance today must also consider new products such as housing microfinance, microinsurance, and electronic banking services including offering cash cards, ATM services, mobile money transfers, and mobile phone banking.

Balance Products & Markets

Banks need to analyze their markets as well as their products to expand services by mixing and matching existing, modified and new products to meet the needs of existing and new markets. Rural banks need to continuously monitor developments in the market as well to better understand the needs of their market niche including focusing on not only their traditional clients such as rural households, micro and small businesses, farmers, fisherman, employees, teachers and local government workers but also new market niches including utility and other bill payment services, remittances, and services for out-of-town workers.  In the area of products and services, rural banks engaged in microfinance today must also consider new products such as housing microfinance, microinsurance, and electronic banking services including offering cash cards, ATM services, mobile money transfers, and mobile phone banking.

Regulations Opening Opportunities

New circulars over the past year are providing even more opportunities for rural banks than ever before. These new developments include an expanded range of banking services that banks can offer via micro banking offices, new “Know Your Customer” rules that make it easier for banks to open up micro savings accounts, an expanded definition of microfinance clients that can avail of microinsurance services, as well as new rules for electronic money issuers and outsourcing electronic money network service providers that open up many new doors for rural banks.

Mobile Money Expanding Horizons

Offers by mobile money platform providers such as Globe’s GCASH and Smart Money are continuing to assist rural banks to expand their market outreach and provide more services than ever before possible. During the conference, Nixon Mahilum of G-Xchange Inc (GXI) also shared the new opportunities for rural banks to facilitate not only greater access to banking services but also new services such as Conditional Cash Transfers under the government’s 4 Ps program (View article) and the offer for rural banks to provide their clients with Rural Bank FaceCards powered by GCASH to allow for greater access to ATM services for their GCASH registered clients. Over 1,000 rural bank branches are now accredited to GCASH and these banks have processed more than PhP 12 billion in mobile phone banking transactions since early 2006.

Smart Money also recently partnered with RBAP to provide training to rural banks who would like to facilitate greater access to Smart Money services including money transfer and payment services whether by phone-to-phone transactions, at an ATM or paying at any MasterCard point-of-sale terminal (View article).