Rural bankers disburse P39 B in microloans

MANILA, Philippines - The country’s rural banking system has disbursed a total of P39 billion in microloans covering roughly 950,000 clients.

Also, since 2006, accredited rural banks have processed more than 2.5 million mobile phone banking transactions valued at more than P13 billion.

In a report released by the Microenterprise Access to Banking Services (MABS) program, in collaboration with the Rural Bankers Association of the Philippines (RBAP), the rural bankers developed a suite of mobile phone banking applications in partnership with Globe Telecom’s G-Xchange Inc. (GXI), which allow more than 300,000 rural bank clients as well as support for conditional cash transfer recipients using the G-Cash platform.

With further collaboration with Smart Communications and Globe, the countryside has gained greater access to credit as well as generate savings through mobile banking technology.

The RBAP and MABS assists rural banks develop the capability to profitably provide financial services – microloans, microdeposits, microinsurance, and remittances – to the microenterprise sector.

During its more than 14 years of operations, the MABS introduced innovations, both in delivery channels by pioneering and expanding mobile phone services and in helping rural banks to develop new microfinance products to serve small farmers (through the micro agri-loan product) and finance construction and housing improvement (through housing microfinace products).

 More than 50 percent of rural banks’ total loans are invested in the agri-agra sector. In addition, more than 32 percent of rural banks’ loan portfolio is invested in the agriculture sector totaling more than P35 billion. Loans to the agriculture sectors have been exceeding 30 percent of the total loan portfolio of rural banks for the past several years.

 Since 1997, MABS worked with over 120 banks with more than 1,300 branches and other banking offices in the developing microfinance products, including microloans, microdeposits, micro-agri lending, housing microfinance, mobile banking, and microinsurance.

These initiatives allowed participating banks of the program to expand and offer new microfinance products and services to their clients.

 “In 2012, rural banks expect to see an increase in mobile banking services and transactions with new products and services using the G-Cash platform as well as new services via Smart Money,” the report added.

Under the Microinsurance Initiative, rural banks can offer microinsurance products and services.

In 2011, a turnkey approach to assist rural banks to become licensed microinsurance agents called TRACS Compliance Process was developed by the Rural Bankers Research Development Foundation Inc. (RBRDFI) with assistance from USAID and the International Labor Organization’s Microinsurance Innovation Facility.

To date, 354 rural bank officers and staff from 168 rural banks have completed the training conducted by RBRDFI in 2011.