RBAP Microfinance Updates

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RBAPMicrofinance Updates
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Policy Initiatives

• Strengthening Microinsurance Options for Clients
  of Rural Banks
• Expanding the Ability of Rural Banks to Offer
  Housing Microfinance Loans
• Partnering with Merchants and E-Money Issuers to
  Expand Outreach to More Clients
• Approval for Rural Banks to Facilitate the
  Issuance of Smart Money Cards for their Clients
• Work to Ensure the Implementation of the Credit
  Information System Act for Rural Banks and their
  Clients

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MICROINSURANCE OPTIONS FOR CLIENTS

• CHALLENGES/OPPORTUNITIES
• Demand for insurance services other than credit
  life
• Mutual Benefit Associations for clients of rural
  banks costly time consuming
• Bank assurance requirements

• GOALS
• Rural banks able to support clients needs for
  expanded insurance services without added risks

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MICROINSURANCE OPTIONS FOR CLIENTS OF RURAL BANKS

• TO ADDRESS THESE CHALLENGES RBAP PROPOSED
• A limited partner-agent microinsurance model for
  rural banks
• Allowing rural banks to
• 1. Disseminate information for multiple partner
  insurance companies
• 2. Facilitation of applications on behalf of the
  partner-insurers
• 3. Collection of premiums for insurers
• 4. Provision of assistance in the processing of
  claims applications and
• pay-outs
• Agreements with multiple insurance companies and
  brokers to improve insurance services for clients
  of rural banks

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HOUSING MICROFINANCE LOANS

• GOALS

• CHALLENGES/OPPORTUNITIES

• Demand for home improvement/home repair as well
  as building homes
• Approved DBP Housing Microfinance loans required
  rural banks to borrow from DBP
• Most banks have sufficient resources for housing
  microfinance

Allow rural banks to offer housing microfinance
loans without depending on external borrowing
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HOUSING MICROFINANCE LOANS FOR RURAL BANK CLIENTS

• TO ADDRESS THESE CHALLENGES RBAP HAS
• Submitted Operations and Procedures Manual to
  allow rural banks to use their own sources of
  funding for Housing Microfinance
• Ensure that the manual sets forth the conditions
  that would allow rural banks to qualify housing
  loans under certain conditions as Housing
  Microfinance Loans
• Set forth the proposal for housing microfinance
  loans up to P150,000 for home improvement and up
  to P300,000 for house and lot acquisition

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MERCHANT PARTNERS FOR M-BANKING SERVICES

• GOALS

• CHALLENGES/OPPORTUNITIES

• Branchless banking via third-party agents is a
  new trend worldwide
• Mobile money makes access to banking easier
• Current restrictions for accredited E-money
  cash-in/cash-out centers
• Thousands of potential merchant partners of rural
  banks can be tapped

Rural banks able to make effective use of
merchant partners to facilitate access to banking
services via E-money
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USING PARTNER MERCHANTS E-MONEY FOR EXPANDED
ACCESS TO BANKING SERVICES

• TO ADDRESS THESE CHALLENGES RBAP PROPOSED
• Accredited rural banks would be able to identify
  and register local merchants as Rural Bank Client
  E-Money Resellers
• Know-Your-Customer (KYC) requirements to be met
  by issuing their clients standard Identification
  (ID) cards
• The accredited rural banks would be responsible
  of training these merchants in customer
  verification procedures and handling E-Money
  transactions

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Proposed ID system
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Cash Loading and Encashment ServicesFor Rural
Banks via Smart Money

• CHALLENGES/OPPORTUNITIES

• GOALS

• Smart Money card-based E-money system
• 39.6 million subscribers
• Ability to make use of ATM facilities
• Rural banks interested to become accredited Smart
  Money money-in/money-out centers
• Helping clients register for Smart Money

Allow smart subscribers to register for smart
money cards at accredited rural banks to
facilitate greater access to banking services
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Cash Loading and Encashment ServicesFor Rural
Banks via Smart Money

• TO ADDRESS THESE CHALLENGES RBAP HAS
• Signed an agreement for Smart to provide a new
  delivery channel for mobile phone banking
  services for RBAP member rural banks using SMART
  Money
• Submitted a proposal to the BSP to allow
• Rural Banks to Facilitate the Distribution of
  Smart Money Cards issued by BDO for its clients
• Rural Banks to accept Cash Loading and Encashment
  Transactions of Smart Money Value

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• Your roadmap for establishing partnerships with
  mobile money issuers for microfinance the
  business case of rural banks

• Exploring the differences between cash money
  transfer customers and mobile money transfer
  customers

• Discovery the value of proposition of m-banking
  for unbanked customers

• How to build a fun brand that customers will trust

• Agents, Networks, and Marketing

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CREDIT INFORMATION SYSTEM ACT

• CHALLENGES/OPPORTUNITIES

• GOALS

• Increasing competition
• Clients now borrowing from multiple sources
  creating over-indebitedness
• Credit Information System Act (CISA)
• Implementing rules and regulations being finalized

Rural banks able to fully participate in the
credit bureau(s) Information on all clients,
including microfinance clients, should be
included in the credit information bureau
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CREDIT INFORMATION SYSTEM ACT

• TO ADDRESS THESE CHALLENGES RBAP has
• Signed MOUs with both BAP-CB and CIBI
• Reviewed the implementing rules and regulations
  proposed for CISA
• Actively working with SEC and BSP to support
  access to the Credit Information System for RBs

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Maraming Salamat!