NRT 2011
May 23-24, 2011
Manila
Session 1:
Taking Advantage of New Regulations to Expand Microfinance Services
By: Ms. Pia Bernadette Roman-Tayag,
BSP Inclusive Finance Advocacy Head
NRT 2011 - Recent BSP Regulations: Opportunities for Rural Banks
2. Recent BSP Regula.ons:
Opportuni.es for Rural Banks
Pia Bernade9e Roman Tayag
Inclusive Finance Advocacy Staff
Bangko Sentral ng Pilipinas
RBAP‐MABS Na.onal Roundtable Conference
23 May 2011
3. Save
Invest
• Microentrepreneur Borrow
living in Baggao,
Cagayan
• 1st class municipality Send/
with no banking office Receive Expensive
• She is one of the Money
Unsafe
73,000 living in the
town Time Consuming
Pay Bills
• She manages a small Unsustainable
sari‐sari store business
7. Expanded Physical Network
• Circular 694, Establishment of Micro‐banking Offices
(MBOs)
– Addresses obstacles in establishing bank offices
• Rela.vely low cost (i.e low infrastructure, no
theore.cal capital needed)
• Need not be a9ached to a microfinance bank or
branch
• Viable in light of complete range of product
offerings
8. Expanded Physical Network
• Circular 694, Establishment of Micro‐banking Offices
(MBOs)
– Expands the products and services that can be
offered
• Micro‐loans
• Micro‐deposits
• Check deposits of exis.ng microfinance clients
• Microinsurance
• E‐money Conversion
• Collec.on/ Pay out of benefits from government
• U.lity payments
• Purchase of foreign currency
10. Opportuni.es for Rural Banks
• Set up presence in areas which were too expensive to
serve (i.e. hard‐to‐reach, etc.)
• Capture savings in areas which were previously not
reached through opening of micro‐deposit accounts
• Increase value to exis.ng clients
• Lower costs of servicing exis.ng clients
• Entertain other non‐bank customers which can
eventually become bank clients (i.e. bills payment,
foreign exchange, etc.)
• Possible opportunity as CCT pay‐out
11. Expanded Virtual Reach
• Circular 649, Electronic Money Circular
– Defines electronic money
– Allows the establishment of e‐money issuers
(whether bank or non‐bank)
– Provides the pladorm for an efficient retail
payments pladorm
– Fosters the establishment of a ubiquitous agent
network
13. Expanded Virtual Reach
• Circular 704, Electronic Money Network Service
Providers
– Recognizes the poten.al of E‐money as an efficient
retail paymentc channel
– Recognizes that the E‐Money business has
specialized opera.onal and technological
requirements
– Allows en..es that want to be EMIs to outsource
to EMNSPs
15. Opportunity for Rural Banks
• Become an E‐Money Issuer without inves.ng in the
en.re network infrastructure
• By outsourcing to an EMNSP, banks will be able to:
– Use the wide agent network established by the
EMIs
– Convert E‐money
– Use E‐money for the payment for goods/ services
– Transfer funds from one electronic wallet to
another
16. Lower Barriers to Customer Acquisi.on
• Circular 706, Updated An.‐Money Laundering Rules
and Regula.ons
– Provides scope for banks to have a risk‐based and
.ered system of classifying customers
– Establishes a framework for applying reduced,
average and enhanced due diligence based on the
type of customer as well as for customer
acceptance, reten.on and iden.fica.on process
and record keeping
18. Opportuni.es for Rural Banks
• Classify transac.ons, based on appropriate
framework, small value transac.ons as low risk
• Lower cost in acquiring customers
• Less physical barriers in reaching and serving new
markets
• Decreased transac.on cost in customer reten.on and
record keeping, par.cularly for microfinance.
• Increased opportunity in remi9ance business