Mobile Microfinance: A Tool for Financial Inclusion & Economic Growth

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Presentation made during the Mobile Money Transfer Asia Pacific Conference (MMT APAC) held in Manila from January 17-20, 2011.

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Mobile Microfinance: A Tool for Financial Inclusion & Economic Growth

  1. 1. Mobile Microfinance: <br />A Tool for Financial Inclusion & Economic Growth<br />John V Owens<br />MMT APAC <br />January 17-20, 2011<br />
  2. 2. What is the MABS Program?<br />The Microenterprise Access to Banking Services (MABS) Program is an RBAP program supported by USAID that provides technical assistance and training to rural banks in microfinance best practices. <br /> The program is designed to develop the capability of rural banks to profitably provide financial services (loans, deposits, insurance, and money transfers) for microenterprise clients.<br />
  3. 3. GCASH<br />& SMART Padala Launch<br />
  4. 4. Challenges for Banks to reach Rural Clients<br />E-Money Creating Opportunities<br /> to meet the Challenge<br />High Transaction Costs<br />Transportation Cost<br />Travel time<br />Loss of business<br /> opportunity<br />Security risk<br />Use of E-Money Reduces Transaction Costs<br /><ul><li>No transportation cost
  5. 5. Reduce time
  6. 6. Fast and convenient
  7. 7. Secure no cash in transit</li></ul>E-Money<br /><br />E-Money<br /><br />
  8. 8. Today, Rural Banks Can Offer the Following Mobile Phone Banking Services…<br />
  9. 9. Rural Bank M-Banking & M-Commerce<br />Ecosystem via GCash<br />P<br />Text-a-Payment /<br /> Int’l & Domestic Remco’s<br />P2P<br />(Domestic Remittance)<br />GCash2Load<br />(Airtime Credit Purchase)<br />Text-A-Sweldo<br />(Salary <br />Disbursement)<br />Text-A-Withdrawal<br />(Withdrawal from Bank Account to GCashWallet)<br />RURAL BANKS<br />Rural Bank<br />Text-A-Remittance<br />Cash-in/Cash-out<br />(Face-to-Face Wallet Funding)<br />Text-A-Credit<br />(Loan / Credit<br />Disbursement)<br />Text-A-Deposit <br />(Deposit to Bank Account)<br />P2P<br />(Purchase of Goods/Services)<br />Text-a-BillPay<br />(Bills Payment)<br />
  10. 10. Mobile Phone Banking Accredited Rural Banks<br /><ul><li>68 accredited</li></ul> Rural Banks<br /><ul><li>979 branches & other</li></ul> banking offices<br /><ul><li> Nationwide coverage</li></li></ul><li>Mobile Phone Banking Outreach<br /><ul><li>RBs registered over 160,000 clients
  11. 11. Over PhP 8 Billion ($190 million) in mobile phone banking transactions via GCASH</li></li></ul><li>New Development Merchant Partners for Mobile Phone Banking <br />Key Lessons Learned in the RBAP-MABS Channel Management Initiative<br />
  12. 12. Channel management supports third parties (Merchants/CICOs) that are providing financial facilitation services to end customers.<br />CUSTOMER<br />Support Services<br />Financial Facilitation<br />
  13. 13. What benefits can Merchant-Partners provide to banks ?<br /><ul><li>Expand geographic coverage without building additional infrastructure
  14. 14. Decongest branches
  15. 15. Refer new customer segments</li></ul>SESSION 6<br />
  16. 16. Determine MPB “Use Cases”<br /><ul><li>Kapitbahay Banking “village banking”
  17. 17. Make loan payments
  18. 18. Pay employees’ salaries
  19. 19. Pay utility bills via mobile phone
  20. 20. Pay suppliers via GCASH</li></ul> (not checks or cash)<br /><ul><li>Send money to relatives (remittance services)
  21. 21. Provide info for a fee (balance inquiry)</li></li></ul><li>Merchant-Partner Selection Criteria<br />
  22. 22. Linking Mobile Money to ATM/POS Systems<br /> One of the important develops is the deployment of solutions linked to ATM/POS<br /><ul><li>Customers can now withdraw funds from their GCASH wallet through any ATM nationwide
  23. 23. Smart Money provides access to ATMs as well as POS Systems via tie-up with MasterCard
  24. 24. MPESA – PesaPoint System cardless ATM</li></li></ul><li>Social Networks <br />Have you heard you can bank via your phone?<br />
  25. 25. Driver’s License<br />Voter’s ID<br />NBI Clearance<br />Identification Cards/KYC<br />
  26. 26. ATMs<br />
  27. 27. Rural Banks<br />Face<br />Card<br />ATM<br />Powered by GCASH<br />GXI<br />
  28. 28.
  29. 29. Launch Services – Customer Adoption<br />Product Development<br />Regulatory Issues<br />Customer Perspective<br />Product Testing<br />Institutional Perspective<br />Environment<br />Preparing Rural Banks to Promote Mobile Money and Mobile Financial Services<br />
  30. 30. The Business Model for Rural Banks to offer and use Mobile Money <br />Reduce Costs<br />Improving Outreach<br />Greater Efficiency<br />Increase Deposits<br />
  31. 31. Acceptance and fear of the use of technology especially among elderly clients<br />Focus on Value Proposition for Clients, Merchants & Customers<br />Issues and Lessons Learnt from Pilot Tests<br />Lack of Mobile Money Outlets or source especially in the rural areas<br />Working with Rural Banks – Networks are key to outreach<br />How to reach clients in remote communities - awareness and information campaign<br />Increasing of volume and usage of mobile money in the rural areas. <br />
  32. 32. Market Research Findings: What clients like<br />Speed of transactions<br />“Money can be sent and received fast.” <br />Security or safety <br />“Account is protected by PIN.”<br />“No need to carry cash which might be lost or stolen.”<br />“You are assured because there is confirmation.” <br />Convenience <br />“Can send money any time.”<br />“Can do transaction without leaving one’s home.”<br />“I do not need to fall in to get my salary.”<br />“I can easily get the money at cash-in/cash-out outlets.”<br />“I can transact even at midnight.”<br /> Cost <br />“Low charges.”<br />“Can save on transportation cost.”<br />“Can save on time.”<br />
  33. 33. Market Research Findings: Clients Concerns<br />Risk<br />“If you lose your cell phone or if your SIM is blocked, you will lose access to your e-money as well.”<br /> <br />Reliability <br />“Technical glitches”<br />“Technical support for problems”<br />“Sending the e-money to the wrong recipient”<br />Misconceptions <br />Misconceptions on time limits of e-money vs. airtime load<br />
  34. 34. An Effective Financial Education Program can:<br />PROMOTE the benefits of shifting from traditional banking to mobile phone banking<br />ADDRESS the misconceptions that hinder uptake and usage<br />BE ANCHORED on merchants and re-sellers to teach clients and recruit potential clients<br />
  35. 35. Tips for Mobile Money Issuers<br /><ul><li>Get money flowing through your system – salaries, government payments, CCT
  36. 36. Build a system that is flexible for multiple business use cases – think Apple iTunes
  37. 37. Make registration process simple and easy – little or no cost & instant
  38. 38. Consider issuing/linking an optional debit/ATM card to your Mobile Money Wallet
  39. 39. Listen to your customers and get out in the field</li></ul>Ur comfort <br />
  40. 40. Additional Materials<br />http://www.rbapmabs.org/blog/wp-content/uploads/2009/02 BN-68-Strategic-Partnerships-for-M-banking.pdf<br />http://www.rbapmabs.org/blog/wp-content/uploads/2009/02/BN-69-Incentivising-3rd-Party-Agents-for-M-banking.pdf<br />http://www.rbapmabs.org/blog/wp-content/uploads/2009/02/BN-70-Pilot-Rollout-Strategies-for-M-banking.pdf<br />http://www.rbapmabs.org/blog/wp-content/uploads/2009/02/BN-71-Creating-a-Tipping-Point-for-M-banking.pdf<br />
  41. 41. Thank You<br />Email:jowens@rbapmabs.comWebsites:http://www.mobilephonebanking.rbap.org/http://blog.mobilephonebanking.rbap.org/<br />LinkedIn: Twitter:<br />John Owens jvowens<br />

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