This document summarizes the trends and challenges facing microfinance over the next decade. It discusses how rural banks need to adapt to changing client preferences by offering more services and increasing accessibility through new channels. Rural banks are facing competition and issues of over-indebtedness among clients. Regulators support microfinance through new regulations that create opportunities in housing, agriculture, microinsurance and e-money products. Branchless banking and improved channel management, such as partnering with merchants, can help rural banks expand outreach while reducing costs and increasing convenience for clients.

1. Trends and Challenges in Microfinance for
this Decade
John Owens
MABS
2010 RBAP‐MABS Na.onal Roundtable Conference
Hya= Hotel and Casino, Manila
June 2‐3, 2010

2. Panel Discussion
1) Market Issues Faced by Rural
Banks
2) Challenges of Competition & Client
Over-Indebtedness
3) Regulations that Support the
Transition to Next Practices
4) Branchless Banking & Channel
Management – Reimagining
Microfinance for Rural Bank Clients

3. Market Issues Faced by RBs
 Clients want more  Banks need broader
services range of services
 Clients want  Banks need to make
convenience banking services
more accessible
 Clients are more  Banks need to
cost conscious reduce costs for
clients
 Outreach via new
 New clients/markets
channels

4. Market Issues Faced by RBs
 Changing micro/  Market Intelligence
macro environment
 Human resources  Need to keep staff
trained and
incentivized

5. Challenges of Competition &
Client Over-Indebtedness
 Banks need to improve their market position
 Banks need to look at new markets and new
clients
 Need to improve transparency & consumer
protection
 Financial Inclusion = Need to Financial
Education
 Credit information sharing in the sector is key
 Better underwriting practices
 Stricter enforcement of zero tolerance

6. Regulators support microfinance
 Regulators are more open to banks in
microfinance but stricter
 Banks need proper methodology and clear
underwriting policies
 Better risk management systems (PAR
monitoring)
 Proper governance practices especially for
NGOs that are now MFI banks

7. Regulators support microfinance
 New regulations create opportunities
 Housing Microfinance
 Agri Microfinance
 Microinsurance
 E-Money Products & Services
 Channel management
 New future areas to watch
 Review on Other Banking Offices
 Definitions of Micro Loans vs. Unsecure Loans
 Definition of Microfinance
 E-Money Platforms/Operations
 Consumer Protection
 Credit Information Reporting

8. Branchless Banking & Channel
Management
 15,000 Cash-In Cash-Out Outlets – facilitate
banking services
 Merchant-Partner Initiative
 Incentivizemerchant-partners
 Financial education via merchant-partners
 Address E-Money liquidity needs of merchants
 Tremendous opportunity to increase outreach
 Address client needs
 Reduce transaction costs
 Increase convenience/accessibility

9. MARAMING
SALAMAT!
Email:
jowens@rbapmabs.org
Websites:
www.rbapmabs.org
www.mobilephonebanking.rbap.org
www.youtube.com/RBAPMABS
Facebook:
MABS Phil