Trends and Challenges in Microfinance

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  • 1. Trends
and
Challenges
in
Microfinance
for
 this
Decade

 John Owens MABS 2010
RBAP‐MABS
Na.onal
Roundtable
Conference
 Hya=
Hotel
and
Casino,
Manila
 June
2‐3,
2010

  • 2. Panel Discussion 1)  Market Issues Faced by Rural Banks 2)  Challenges of Competition & Client Over-Indebtedness 3)  Regulations that Support the Transition to Next Practices 4)  Branchless Banking & Channel Management – Reimagining Microfinance for Rural Bank Clients
  • 3. Market Issues Faced by RBs   Clients want more   Banks need broader services range of services   Clients want   Banks need to make convenience banking services more accessible   Clients are more   Banks need to cost conscious reduce costs for clients   Outreach via new   New clients/markets channels
  • 4. Market Issues Faced by RBs   Changing micro/   Market Intelligence macro environment   Human resources   Need to keep staff trained and incentivized
  • 5. Challenges of Competition & Client Over-Indebtedness   Banks need to improve their market position   Banks need to look at new markets and new clients   Need to improve transparency & consumer protection   Financial Inclusion = Need to Financial Education   Credit information sharing in the sector is key   Better underwriting practices   Stricter enforcement of zero tolerance
  • 6. Regulators support microfinance   Regulators are more open to banks in microfinance but stricter   Banks need proper methodology and clear underwriting policies   Better risk management systems (PAR monitoring)   Proper governance practices especially for NGOs that are now MFI banks
  • 7. Regulators support microfinance   New regulations create opportunities   Housing Microfinance   Agri Microfinance   Microinsurance   E-Money Products & Services   Channel management   New future areas to watch   Review on Other Banking Offices   Definitions of Micro Loans vs. Unsecure Loans   Definition of Microfinance   E-Money Platforms/Operations   Consumer Protection   Credit Information Reporting
  • 8. Branchless Banking & Channel Management   15,000 Cash-In Cash-Out Outlets – facilitate banking services   Merchant-Partner Initiative   Incentivizemerchant-partners   Financial education via merchant-partners   Address E-Money liquidity needs of merchants   Tremendous opportunity to increase outreach   Address client needs   Reduce transaction costs   Increase convenience/accessibility
  • 9. MARAMING SALAMAT! Email: jowens@rbapmabs.org Websites: www.rbapmabs.org www.mobilephonebanking.rbap.org www.youtube.com/RBAPMABS Facebook: MABS Phil