microfinance opportunities amidst the new regulatory environment 2010
DESCRIPTION
Challenges and Opportunities in Microfinance for Rural Banks Amidst the New Regulatory Environment in the Philippines in 2010.TRANSCRIPT
Outline of Presentation
RBAP-MABS Program Challenges Facing Rural Banks Microfinance Opportunities in 2010 Beating the Challenges & Achieving
Success
What is the MABS Program?
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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: [email protected]
Websites: www.rbapmabs.org
www.mobilephonebanking.rbap.org www.youtube.com/RBAPMABS
Facebook: MABS Phil