Leveraging mobile banking channels for client education
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The USAID-supported RBAP-MABS Program presented its Financial Education for Branchless Banking Project, an initiative implemented in partnership with MasterCard Foundation and Microfinance Opportunities. The presentation highlighted how the initiative is supporting rural banks’ mobile phone banking services rollout and how it facilitates the expansion of services to clients in areas that are hard-to-reach.
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Leveraging mobile banking channels for client education
- 1. Leveraging Mobile Banking Channels for Client Education Cheryl Lualhati B. Balingit Citi-FT Financial Education Summit November 27, 2011
- 2. What is the MABS Program? 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. 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.
- 3. GCASH & SMART Padala Launched
- 4. Rural Bank M-Banking & M-Commerce Ecosystem via GCASH RURAL BANKS Text-a-Payment / Int’l & Domestic Remco’s P Text-A-Sweldo (Salary Disbursement) Text-A-Remittance Cash-in/Cash-out (Face-to-Face Wallet Funding) Text-A-Withdrawal (Withdrawal from Bank Account to GCash Wallet) Text-A-Credit (Loan / Credit Disbursement) P2P (Domestic Remittance) GCash2Load (Airtime Credit Purchase) P2P (Purchase of Goods/Services) Text-a-BillPay (Bills Payment) Text-A-Deposit (Deposit to Bank Account) Rural Bank
- 5. MasterCard Financial Education for Branchless Banking Project Increase the up-take and use of mobile banking services through the use of financial education tools
- 6. Market Research Findings What if I send the money to the wrong recipient? Will my GCASH expire, just like airtime load? My account is protected by my MPIN so it is safe. If I lose my cell phone or if my SIM is blocked, I will lose access to my e-money as well. Money can be sent and received fast! No need to carry large amounts of cash around! I can save time and save on transportation cost.
- 8. A new service that rural banks are offering that can help clients Save Time and Money, because now they can do banking transactions using cell phones from wherever they are without having to go to the bank .
- 10. mag-CellBank! in Baungon: Everyday banking made easier 1 st Valley Bank Cagayan de Oro Branch
- 12. Thank You! E-mail: [email_address] Websites: http://www.rbapmabs.org http://www.mobilephonebanking.rbap.org/ http://blog.mobilephonebanking.rbap.org/
Editor's Notes
- The MABS Program has helped over 115 rural banks with more than 1,100 branches and other banking offices to expand and offer new microfinance products and services. As of September 2011, MABS participating rural banks have disbursed over 2.9 million loans totaling PhP 38 billion ( $ 870 million ), about 7.8 trillion Indonesian rupiahs to more than 919,000 new bank borrowers. These partner banks also manage more than 1.4 million micro deposit accounts with an overall balance of more than PhP 2 billion ( $48 million ) or 431 billion Indonesian rupiah . Aside from training and technical assistance in MF best practices, MABS continuously has an “ear to the ground” when it comes to technologies and innovations that have the potential to improve efficiency of operations and expands outreach. Which brings us to the development of mobile phone banking services to be offered by rural banks.
- 10 years ago there were 23 million bank accounts, today, there are around 32 million deposit accounts in the Philippines. Now lets compare the growth of the mobile phone industry. In 1998 there were 1.7 million mobile phone subscriptions in the Philippines, by 2004, when MABS started working on mobile phone banking services for rural bank clients, the number of subscribers had already surpassed the number of bank accounts and today, there are now twice as many mobile phone subscriptions as there are bank accounts in this country. This number is over 68 million at the end of 2008 and is projected to exceed 76 million by the end of 2010. 73 accredited Rural Banks 1,165 branches & other banking offices RBs registered over 311,000 clients & CCT recipients Over PhP12.3 Billion ($275 million) or 2.47 trillion Indonesian rupiah in mobile money-enabled banking transactions,PHP333.2 million monthly
- This is the mobile commerce ecosystem within a community served by a rural bank offering mobile phone banking services
- Launched in June 2010, the Financial Education for Branchless Banking Project is implemented by the RBAP-MABS Program with support from MFO, a Washington-based global nonprofit that develops consumer-focused ideas and solutions for the microfinance industry. The project, which is implemented in partnership with The MasterCard Foundation, aims to increase the uptake and use of mobile phone banking services through the use of financial education tools. PROMOTE the benefits of shifting from traditional banking to mobile phone banking ADDRESS the misconceptions that hinder uptake and usage BE ANCHORED on merchants and re-sellers to teach clients and recruit potential clients
- Earlier this year, MABS and MFO conducted focus group discussions and interviews with target groups and individuals to gather sufficient information for the design of the financial education program’s content and delivery strategy. The results showed the information gaps and users’ fears that needed to be addressed to encourage trial and eventual adoption of mobile phone banking services. The challenges facing bank staff in promoting MPBS also surfaced, with the lack of training and teaching materials as among the most pressing. The study also brought to light the need for materials for the use of banks’ cash-in/cash-out (CICO) partner-merchants. CICOs are businesses, usually neighborhood sari-sari (variety) stores, where clients can cash-in (change cash to GCASH) or cash-out (change GCASH to cash). Speed of transactions “ Money can be sent and received fast.” Security or safety “ Account is protected by PIN.” “ No need to carry cash which might be lost or stolen.” “ You are assured because there is confirmation.” Convenience “ Can send money any time.” “ Can do transaction without leaving one’s home.” “ I do not need to fall in to get my salary.” “ I can easily get the money at cash-in/cash-out outlets.” “ I can transact even at midnight.” Cost “ Low charges.” “ Can save on transportation cost.” “ Can save on time.”
- This is what clients like about mobile banking: “ Mobile banking saves us time and money ”. “If you save time, you save money. We don’t need to travel and we do not need to pay for transportation costs.” FGD with active clients. The tools highlight the positioning of mag-CellBank! as helping rural bank clients save time and money. Microloan borrowers do not need to travel to the bank to pay their loan amortizations. Using mag-CellBank/Text-A-Payment, they can pay their loans from wherever they are. Since they do not need to travel to the bank, they save on time and transportation costs. Through Text-A-Deposit, depositors can deposit to their account as frequently as they want and in small amounts. Because they can easily and conveniently make deposits, clients can build up their savings and avoid spending their savings on non-essential purchases. While Text-A-Withdrawal allows them to conveniently make withdrawals without having to come to the bank. For banks, mag-CellBank allows them to expand to areas that are otherwise, hard-to-reach. Account officers do not need to travel to these areas as frequently as when they had to make collections – they only have to schedule regular monthly monitoring visits. Because they no longer collect and carry money from the field back to the bank, account officers are less exposed to risks like highway robbery.
- The toolkit comprises: Two posters (promoting Text-A-Payment and Text-A-Deposit) designed to be displayed in bank branch lobbies and storefronts of CICOs; A tri-fold standee for CICOs’ countertops and display areas; A two-sided standee for banks’ countertops; A picture flipbook, that utilizes storytelling to communicate the benefits of mag-Cellbank and outlines the procedure for completing transactions as well as stories for how and why to use a mobile phone for loan payments and for deposits. An all-in-one user’s manual which contains step-by-step instructions for completing transactions, a section teaching clients how to make savings plans and savings goals, with pages where clients can set up their own savings plan and goal, a frequently asked questions and troubleshooting section which highlights the safety features of the service; and a table where clients can record their mag-CellBank transaction details;
- The benefits of mag-CellBank! are clearly seen in a place like Baungon, Bukidnon. Baungon is a 2 nd class municipality about 45 kilometers south of Cagayan de Oro City. The municipality is accessible by a road that is mostly unpaved, narrow, and winding making travel difficult. Residents have to endure the dust during the dry season and slippery, muddy roads during the wet season. Despite the poor road infrastructure, Baungon is a thriving community. Agriculture is the main industry, with most of the residents growing cassava and papaya as contract farmers for big agricultural companies. 1 st Valley Bank’s Cagayan de Oro City Branch expanded to Baungon in 2010 and is currently serving microloan borrowers from the area. The area’s distance from the branch, compounded by the rough roads, make weekly collections very costly for the bank. There are stretches of the road passing through forested areas where highway robberies and hold-ups have occurred even in broad daylight and this poses a very real danger for account officers who regularly have to collect and transport money. On the other hand, traveling to the bank to pay their amortizations is very costly for the clients. They have to pay PHP85 (US$2) each way for the 35-minute jeepney or van ride. Which is why microloan client Irene Paredes welcomes mag-CellBank! “ This will now make it easy for me to pay my loans, I do not have to wait for the account officer anymore every week. My schedule is irregular, sometimes I have to run errands, so this ( mag-CellBank!) is very convenient for me. I am also thinking about becoming a CICO partner – I know that are a lot of households here that have children studying outside Baungon – I may be able to serve their remittance needs ”. Microloan clients Shirley Pitalgo also appreciates the service, since she does not leave her home and small bakery to do bank transactions. Ms. Pitalgo has three small children, and a half-day of travel to the bank means she has to request one of her siblings or her mother to take care of them. The last two pictures are from the flipbook, as you can see, the stories end in a positive note – Maria, the main character, is able to save time and also able to build her savings for the future.