Outline of Presentation

 RBAP-MABS Program  Challenges Facing Rural Banks  Microfinance Opportunities in 2010  Beating the Challenges & Achieving

Success

What is the MABS Program?

0.1 12 171

336

541 567

982 1,002 1,104

1,578 1,688

1,831 1,930

482 11,601

197,146

349,459

482,488 523,713

743,659 771,799

835,469

1,170,669

1,280,994

1,424,111 1,458,905

0.0

500.0

1,000.0

1,500.0

2,000.0

2,500.0

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1998 1999 2000 2001 2002 2003 2004 2004 2005 2006 2007 2008 2009

Am

t. of

Mic

ro D

epos

it B

alan

ce (i

n M

illio

ns)

No.

of M

icro

Dep

osito

rs O

utst

andi

ng

Micro-­‐Deposit  Performance  Indicators    1998  -­‐  2009    

Amt. of Micro Deposit Balance (In Millions) No. of Micro Depositors Outstanding

Challenges Facing Rural Banks Offering Microfinance Services

Growing Competition

Need for Product

Diversification Demanding

Clients High

Operating Costs

Opportunities in 2010

NEW REGULATIONS TO SUPPORT MICROFINANCE

 Housing Microfinance Circular  Micro Agri Circular  Approval of Cash-in Cash-out

outlets for GCASH (virtual M-Banking ATM network)

 Microinsurance Circular

Housing Microfinance (Circular 678)

PURPOSE House Construction, House and/or Lot

acquisition, Home improvement/Repairs LOAN AMOUNT

- Up to P300,000 for House and/or Lot - Up to P150,000 for Home Improvement

TERMS - Up to 15 years for house construction and house and/or lot acquisition - Up to 5 years for home improvement/repairs

INCENTIVES

  Compliance with agri-agra mandate   Eligible for rediscounting with the BSP   Assigned risk-weight of 0-50%   Alternative collateral substitution allowed

Housing Microfinance (Circular 678)

PURPOSE/TERM - Short term purposes only of up to 12 months ELIGIBILITY -  Clients with multiple income generation activities LOAN AMOUNT

Up to PhP150,000 PAYMENT

- Frequent amortization (weekly/monthly) - Up to 40% lump sum payment can be considered

Micro-Agri (Circular 680)

BSP APPROVES LARGEST CASH-IN AND CASH-OUT NETWORK

Bank coordinates with GXI for AutoLoadMax Dealers to provide Cash-Out functions

BSP Circular on Microinsurance

  Rural and thrift banks approved to market, sell & service microinsurance

  Opens up microinsurance as an allied undertaking

  Rural banks have the potential to attract and serve millions of customers

RBAP-MABS Helping RBs Beat the Challenges & Achieve Success in 2010

MABS APPROACH

REVISIONS

AUTOMATING LOAN

APPLICATIONS MOBILE PHONE BANKING

HOUSING MICROFINANCE

MICRO-AGRI

MICROINSURANCE SERVICES

MABS APPROACH TRAINING & TECHNICAL SERVICES

 Product Development Modular Course  Market Research (Toolkit & Survey Forms)  Product Development (Manuals & Procedures)  Loan Administration & Management (Pilot)  Operations Review

 Offered by MABS Service Providers  Punla Sa Tao  ARMDEV  MICRA Philippines

MABS Loan Application Revisions

Objectives:   Improve loan processing efficiency

  Updating the MABS Approach training materials to enhance processing efficiency

  Streamlining the forms for CIBI and cashflow analysis

         Manual  Loan  System     AOs  manually  prepare  loan  forms    

  Time  consuming    Poten6al  for  errors    Incomplete  loan  forms    Costly  

Automated  Loan  System   New  technology  can      automate  and  reduce  6me,  errors,  and  costs  

Automated Loan Applications & Documentation

Cost  of  PCs  for  the  field   Netbooks  –  price  (as  low  as  9k)  

 Automated  soCware  can  make  loan  processing  faster  &  more  efficient  

 Loan  documenta6on  (CIBI,  cash  flow)  

 Credit  scoring  

 Regular  and  special  surveys  

Automated Loan Applications & Documentation

THE POWER OF AUTOMATION

Internet  

1

Field officer gathers information on site and sends the results to the branch via the Internet

2

Field officer gathers information on site then travels back to the branch to upload the results

Microenterprise Access to Banking Services Program www.mobilephonebanking.rbap.org

RBs Offer the Following Mobile Phone Banking Services…

Client

Loan Payment

Deposit

Withdraw

Reload Airtime

Loan Release

Send Money (Remittances)

Bills Payment

Payroll Servicing

Mobile Phone Banking

PERFORMANCE & ACCOMPLISHMENTS   No. of Accredited Rural Bank Outlets = 886   RBs registered over 70,000 clients & processed

over 5 Billion in GCASH transactions

Mobile Phone Banking

ON-GOING EVENTS   Mobile Phone Banking Marketing Program

  Mobile Phone Banking & GCASH Accreditation Training

 February 17 in Clark   March 3 in Tagaytay   March 17 in Cebu

Mobile Phone Banking

PLANS & FUTURE DEVELOPMENTS   Continuing support and promotion of

SMS Alerts service for rural banks   Support savings mobilization study

with Yale University & IPA   To create more incentive programs to

drive volume and habituate users to use MBanking and increase fee-based income of the rural banks

 BSP’s new circular encourages banks to offer housing microfinance loans.

 Market analysis shows high demand for home improvement

 Pilot tested new housing microfinance products in 2009

 Now ready for rolling out to interested and qualified banks

Housing Microfinance

Housing Microfinance Pilot Test Results

Indicator  

No.  of  Branches   40  

No.  of  Borrowers  Outstanding   756  

Loan  PorQolio  Balance   PhP  17.3  M    

Cumula6ve  No.  of  Loans  Disbursed  

970  

Cumula6ve  Amount  Disbursed   PhP31.2  M  

PAR  30   2.19%  

Housing Microfinance Client Green Bank

1st Loan Window Grills 2nd Loan Room Partition

Next Loan Room Renovation 3rd Loan Ceiling

A group loan client for 5 yrs.

Housing loan of PhP50K leveraged P50k client has put in to complete house

Business: sarisari store; buy-sell seafood

Housing Microfinance Client Cantilan Bank Client

Micro-Agri Loan

 Loan amounts based on cash flow & capacity vs. per hectare analysis

 Regular amortization payments

 55 RB branches

 40,000 loans over PhP520 million

 17,500 small farmers reached

Micro-Agri Clients

Rustom Embudo, MAP client of RB Talisayan, under the amortized-balloon payment scheme, 3rd loan cycle, Php14,000.00 - poultry

Winnie Laanan, MAP client of Valiant Bank, under the straight amortization payment scheme, 5th loan cycle, Php50,000 - piggery

Regerio Arreza, MAP client of Cantilan Bank under the Amortized-Balloon payment scheme, 7th loan cycle, Php13,000 -rice farming

Microinsurance Services

Targeting Microinsurance

Advocacy on Product Affordability

Coordination with BSP & IC

Supportive policies for RBs distributing microinsurance

Targeting Microinsurance

Providing commercial insurers with relevant market information to influence more effective product development

Targeting Microinsurance

CLIENT DEMAND

Local Market Demand Studies conducted in rural banks

Facilitating transitions from informal to formal microinsurance services

Microinsurance Services

Key Products

RBAP Partner Micro-Insurance Providers LIFE INSURANCE COMPANIES

Ayala Life Assurance, Inc. (now BPI PhilAm) Country Bankers Life Insurance Corp. PhilAm Life General Insurance Company Philippine Prudential Life, Inc. Pioneer Life Insurance United Coconut Planters Life Assurance Corp. (CocoLife)

NON-LIFE and COMPOSITE COMPANIES

Malayan Insurance Company, Inc.

INTERMEDIARIES

Assistance Alliance International, Inc. MicroEnsure Philippines

“We must become the change we want to see.”

Mahatma Gandhi

MARAMING SALAMAT!

Email: jowens@rbapmabs.org

Websites: www.rbapmabs.org

www.mobilephonebanking.rbap.org www.youtube.com/RBAPMABS

Facebook: MABS Phil