The Microenterprise Access to Banking Services (MABS) program continues to attract international attention for its innovative use of mobile-phone technology for microfinance. In the January 2008 issue of Expanding Horizons, mobile-phone maker Nokia’s quarterly publication on new-growth markets, MABS is featured in an article about the Philippine Central Bank’s “exemplary” approach to mobile-phone banking regulation and the doors that it opened for the project.
“This article and others like it show the important role that MABS and its partners have taken to design, develop and implement mobile phone banking services for rural bank clients in the Philippines, and the exemplary role that the central bank has played in supporting this development.” said John Owens, the chief of party for MABS. “I think that’s significant for the project.”
Last November, the MABS-designed mobile-phone banking initiatives and the banks implementing these services were featured in The Economist and the Financial Times.
The article, which appears in an issue whose theme is “realizing the potential of mobile banking,” explains how the Philippine Central Bank has created an enabling environment for mobile banking, or m-banking. In response to an application submitted by the Rural Bankers Association of the Philippines and MABS, the bank agreed to allow rural banks to offer m-banking for microenterprise clients, which provided a model for other central banks in the world to follow.
With that kind of enabling environment, the article states, MABS was able to join hands with G-Xchange Inc., the mobile commerce subsidiary of Globe Telecom, which is one of the Philippines’ biggest telecoms companies.
As of February 2008, 43 rural banks through 300 branches are now offering m-banking. “Transactions are growing and have increased substantially over the previous year, with more than 2,000 clients being registered weekly by rural banks as m-banking clients,” Owens said. “The potential for widespread m-banking is significant — about 90 percent of rural bank clients use mobile phones.”
The article was based on a presentation given by MABS, G-Xchange, and the Philippine Central Bank at the World Bank in Washington, D.C., last September. Nokia, along with other multinational corporations and donor organizations, was in attendance. The conference featured technologies used by pioneering organizations in the financial services industry to reduce costs, reach new customers, and scale up delivery of services.
MABS’ participating banks have provided more than 1.4 million loans totaling more than $325 million to 460,000 microenterprise clients since 1999. The banks also manage nearly 1.2 million micro savings accounts, totaling more than $40.4 million.