This slideshow on private partnerships to facilitate mobile phone banking services for low-income households in the Philippines was presented at Chemonics International on January 30, 2009.

1. Developing Private Partnerships to
support Mobile Phone Banking
Services for Low Income Households
in the Philippines
JOHN V. OWENS
CHEMONICS INTERNATIONAL
JANUARY 30, 2009

2. Country Context:
Philippines
• Population: 90 million
• Rural Population: 50%
• Per Capita GNI: $1,671
• Pop. In Poverty: 30%
• Annual Remittances: $16 B
• Mobile Phone Subscriber
Base: 66 M
• # of Mobile Phones per 100
people: 73
INSERT MAP OF THE
PHILIPPINES

3. 0
10
20
30
40
50
60
70
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Est
2008
Bank Accounts Mobile Phone SubscripAons
Bank Accounts vs. Mobile Phone
Subscrip8ons
Philippines (in Millions)
Microenterprise Access to
Banking Services
www.rbapmabs.org

4. Rural Banks in the Philippines
• Wide network coverage:
– 700 rural banks with 2,100 branches
• Over 50 year history
• Over US$3.5 billion in assets
• Over 6 million deposit accounts
• Over 1.5 million borrowers

5. What is the MABS Program?
Microenterprise Access to Banking Services www.rbapmabs.org

6. Mobile Phone Banking and E-Money (How it Works)
Microenterprise Access to Banking Services Program
www.rbapmabs.org

7. Challenges for Banks to reach
Rural Clients
High Transaction Costs
– Transportation Cost
– Time time
– Loss of business
opportunity
– Security risk

8. 
E-Money

E-Money Creating Opportunities to meet
the Challenge
Use of E-Money
Reduces Transaction
Costs
- No transportation cost
- Fast
- Secure no cash in
transit

9. Microenterprise Access to Banking Services Program
www.rbapmabs.org
Today, Rural Banks Can Offer Following Mobile Phone
Banking Services…
Clients
Receive
Loans
Loan
Payments
Deposits
Withdrawals
Reload
Airtime
Send Money
(Remittances)
Bill Payments
Receive
Payroll

10. Benefits of Branchless Banking (Along the Value Chain)
E-money
Merchants and
Resellers
Increase walk-in traffic
Revenue from fees
Ability to accept
electronic payments
Client
Banking anywhere,
anytime
Save time and money
Safe and secure
Bank
Leverage Merchants,
Resellers and Mobile Phone
subscribers to expand
client base
Efficiency and savings on
operating costs
Increase deposit levels
Microenterprise Access to Banking Services Program
www.rbapmabs.org

11. Private Partnerships & Strategic
Alliances to provide increased access to
banking services for low income
households
Microenterprise Access to Banking Services Program
www.rbapmabs.org

12. Microenterprise Access to Banking Services Program
www.rbapmabs.org
Breakthroughs & Milestones: With Partners
2004-2005
RBAP signed an MOA with
Globe (GXI) for Loan Payment
using Gcash
BSP approved pilot of Text-A-
Payment to selected rural
banks
Autoloadmax retailers as
Gcash outlets was launched
Study on Cost Savings
conducted to selected rural
banks on the use of Gcash for
loan payment
2006
Some RBs started paying
employees salaries or
allowances with Gcash
M-commerce was used by
local merchants
BSP approved Cash-in/Out
(Text-A-Remittance) services
for rural banks
BSP approved Text-A-Deposit
service for rural banks
Strategic Planning was
conducted with 5 pilot banks

13. Microenterprise Access to Banking Services Program
www.rbapmabs.org
2007
Text-A-Sweldo service
expanded to other
businesses in the community
Text-A-BillPayment was
initiated by a rural bank with
local utility cooperative
Text-A-Withdrawal was
approved by BSP
Mobile Phone Banking
Specialist Program was
launched
2008
More than 70,000 new users &
3,500 local merchants
Mobile Phone Marketing program
launched
45 rural banks with more than 650
branches and kiosks are accredited
RBAP and Globe (GXI) partnership
renewed
RBAP signed an agreement with
Nokia Philippines (Nokia phone
financing and promotional materials)
RBAP Signed an agreement with
Smart Communications (Smart
Money)
Agreement with MyClick
Breakthroughs & Milestones: With Partners

15. PRODUCT DESCRIPTION
CLICKSOFTWARE® SMS Gateway System is a
software solution that enables you to send and receive
SMS and short messages over a cellular network and
connect to computerized database. The system is a
plug-and- play application that instantly enables your
computer to send out SMS messages.
The system is also capable of extracting data from your
database via parameterized text messages for two-way
automatic messaging to be sent back to the requesting
party.

16. BALANCE INQUIRY
BAL ON ACCOUNT
1234567
Send message to bank messaging
number
THE BALANCE ON
ACCOUNT NO.
1234567 IS PHP
3023.50
LOCATION WHERE
APPLICATION IS HOSTED
1
2
3
4
5
6
SMS will be received by the SMS
Gateway System and process
Extract info from the database
Converts back data to SMS to send
back to inquiring party
Telco
receives
SMS
Inquirer will receive the info
demanded

17. AUTOMATIC ANNOUNCEMENT OF LOAN APPROVAL/DISSAPPROVAL
BANK
1
From Acme Bank: Mr.
Santos your loan was
approved, please contact
543-1234 for details.
System periodically check loan
database for status approve, when
approved it will send a predefined SMS
message to the customer using the
customer database
2
Telco
receives
SMS
3
Customer receives the
notification of loan

18. Bank Case Study:
PR Bank’s Implementation of
Mobile Phone Banking
• 32 branchesNo. of Branches &
Kiosks
• Over 137,000 transactions
• Totaling P709.8M ($16M)
M-Banking
Transaction
Volume 2008
• 110No. of Registered
Merchants
• 2,940 clients
• 1,940 employees
• Walk-in Clients
No. of Registered
M-Banking Clients
Microenterprise Access to Banking Services Program
www.rbapmabs.org

19. Implementation of Text-A-Sweldo
Payroll Servicing through GCASH in CEZA
• Cagayan Economic Zone
Authority (CEZA)Client Name
• PR BankBank
• 2008
Using MPB
since
• Text-A-Sweldo (TAS)
• Serving almost 1, 000 employees
MPB Services
Microenterprise Access to Banking Services Program
www.rbapmabs.org

20. Microenterprise Access to Banking Services Program
www.rbapmabs.org
Bank Case Study: The growing mobile ecosystem
of Cantilan Bank
• 12
• (Surigao areas)No. of Branches
• P112.8M ($2.5 million)
• (Jan to Dec 2008)
Amount of
Transaction
Volume
• P435,900 ($9,900)Mbanking Fee
Income
• 644No. of
Registered
Merchants
• 13,700No. of
Registered M-
Banking Clients
Surigao del
Sur II
Electric
Cooperativ
e

21. M-BANKING TRANSACTIONS
CANTILAN BANK 2009
1551
1422
1588
2165
1855
2302
2796
2223
2784
2434
2741
2468
0
500
1000
1500
2000
2500
3000
0
2000000
4000000
6000000
8000000
10000000
12000000
14000000
16000000
Jan. Feb. Mar. Apr. May June Jul. Aug. Sep. Oct. Nov. Dec
Total
TransacAons

22. Amount of M-Banking Transactions by Type

23. John Owens
jowens@rbapmabs.org
Visit our website:
www.mobilephonebanking.rbap.org
Mobile Phone Banking installations Nationwide
Microenterprise Access to Banking Services Program
www.rbapmabs.org