MANILA, Philippines - Wireless leader Smart Communications Inc., a unit of dominant carrier Philippine Long Distance Telephone Co. (PLDT), is set to venture into the country’s first mobile microfinance banking.
Tricia Dizon, head of the Financial Services of Smart, said in a statement that the company would power the country’s first microfinance bank of mBank, fully utilizing mobile technology to deliver convenient services to Filipinos with little or no access to the formal banking system.
Dizon pointed out that Smart would support the PLDT-Smart Foundation, mobile microfinance holding company mBank Holding, Finnish development finance company Finnfund, and Dutch development bank FMO in launching mBank Philippines.
The microfinance firm would provide members of the low-income population with savings and loan products exclusively on a mobile platform.
“By launching a mobile microfinance facility, we will be giving the unbanked access to savings products and bank loans that can help improve their lives,” she stressed.
According to her, a survey showed that seven out of 10 Filipinos do not have an account at a formal financial institution mainly because of steep deposit requirements and the absence of banks in remote areas.
“But almost all Filipinos have a mobile phone,” she said.
Pilot services are already being offered by mCompany, a non-government organization whose operations will spin off into mBank Philippines once the Bangko Sentral ng Pilipinas approves its application for a formal banking license.
“By offering simple and effective financial services, mCompany and eventually mBank seek to increase financial inclusion and ensure that people have enough money at any given moment,” Dizon said.
Once mBank is launched, Smart and Talk ‘N Text subscribers would be able to open a savings account with the help of mBank field agents deployed in their communities. Activated account holders could apply for a loan product that interests them, immediately get a response about their application, and select a weekly repayment schedule – all via their mobile phone.
“The process eliminates the need to travel far to deposit and withdraw money, apply for loans, and pay amortization. This is very convenient especially for those who cannot afford to be absent from work or leave their sari-sari stores,” Dizon said.
mBank will operate a very advanced credit risk management capability delivered by Experian, the global leader on credit risk management automation.
As of Oct. 16, mCompany already had 110 account holders and had already disbursed P265,700 in loans to Smart subscribers.