TMCnet News
More banks to open access to micro-entrepreneurs (Business)ZAMBOANGA CITY, Dec 10, 2008 (Asia Pulse Data Source via COMTEX) -- The United States Agency for International Development (USAID)-funded Rural Bankers Association of the Philippines (RBAP) intensifies effort to make banking services accessible to micro-entrepreneurs aimed to assist 550 rural banking units and branches nationwide through the Micro-enterprise AccessBanking Services (MABS), a program that originally hails from Mindanao. The MABS program aims to increase the number of micro-borrowers among participating rural banks by more than 375,000 within a five-year period starting this year until 2013. A total of 30 participating banks with more than 200 bank branches and satellite offices in Mindanao have already received training and technical assistance under the MABS program based on its Sept. 2008 data. MABS Chief of Party John Owens said that Mindanao experienced a growth in rural banking, noting that the island-region has reached a cumulative number of loans of P10.1 billion out of the overall P20.7 billion since the inception of the program. Owens said there has also been a tremendous growth in deposits in Mindanao over the years with P797 million poured in these banks out of the P1.7 billion. He said the rural banks are in better position to weather the changes in the financial market by providing microfinance services and focus on deposit mobilization especially with the apprehensions caused by the current global financial crunch. The MABS 4 program will also work on expanding micro agri-lending and conduct a market research with additional banks for a micro agri-loan product (MAP). The program will also initially work with small group of banks to develop and pilot housing microfinance products. Mindanao Economic Development Council (MEDCo) chairman Virgilio Leyretana hopes that Mindanao would be able to get a large chunk of development support through the program's assistance to rural banks and microfinance institutions in Mindanao which are the conduit of many of "our micro, small and medium entrepreneurs." MABS-4 is implemented as one of the programs under the USAID's Mindanao Peace and Development (MPAD) Fund, for which the MEDCo serves as the Oversight Implementing Agency (OIA). A total of 90 MABS participating banks with 46 from Luzon and 14 from Visayas have already received technical assistance and training under the MABS program. At present, these trained banks are providing microfinance services that include loans, deposits, and money transfer services through some 453 bank branches and satellite offices all over the country. Leyretana said that it is important to point out that USAID provides no loan funding for these banks and almost all the money for their lending activities come from deposits. Data from the participating banks during the third quarter shows that more than 34,000 new borrowers were provided with loans by Mindanao participating banks during the first nine months of the year with these banks now serving more than 67,300 active micro borrowers,Leyretana disclosed. The number of new micro borrowers reached in Luzon and Visayas have also increased significantly over the past year with over 70,800 active micro borrowers in Luzon and over 64,600 in the Visayas. MABS will also continue to implement the mobile phone banking services (MPBS) that was developed in 2004 in partnership with G-Xchange (GXI). A website was launched by RBAP with support from GXI atwww.mobilephonebanking.rbap.org to highlight the services that the MABS program helped develop for rural banks. The program will also support rural bank plans to pilot test mobile phone banking services using Smart Telecommunications--Smart Money platform in 2009. MABS said that banks and clients find significant advantages in MPBS because of reduced cost, security and convenience in accessing financial services as well as improve transparency, helps control fraud and reduces errors in transactions for rural banks. More than 67,000 rural bank clients and employees have registered to use mobile phone banking services as of September 2008. The MABS program began working with four banks in Mindanao in 1998.The program was expanded in 2001 under the leadership of the RBAP as the main implementer serving all regions of the country with participating banks in Mindanao serving as examples and models. The First Valley Bank, founded in Lanao del Norte and one of the Mindanao participating banks during MABS' first rollout in 1999, has opened its 16th branch in Zamboanga City. The USAID reported that the bank grew from six to 16 branches and P260 million to P 2.04 billion in 2007 with 68,000 client-micro-depositors. First Valley Bank President Nicolas Lim said that the microfinance services allowed the bank to play an active role in poverty alleviation without sacrificing the profit motive. In February, three out of the five MABS participating banks that were recognized as being among the top 100 microfinance institutions all over the world in terms of outreach to voluntary micro-depositors were from Mindanao. These banks included Green Bank, Cantilan Bank and the Cooperative Bank of Misamis Oriental. DCT/TPG/utb |