Since 1997, USAID has provided support for the Rural Bankers Association of the Philippines Microenterprise Access to Banking Services (RBAP MABS) program www.rbapmabs.org [A1]  which has been providing training and technical assistance to its participating rural banks to help them establish profitable, sustainable microfinance operations. MABS works under the Rural Bankers Research and Development Foundation (RBRDFI) to provide training and technical assistance to 700 member rural banks with more than 2,150 branches nationwide.   Over 200 rural banks now have active microfinance operations reaching more than 800,000 borrowers.   The sector as a whole provides deposit services to mostly low income households and they now manage more than 6 million deposit accounts. MABS has identified however that rural banks need to improve efficiency and reduce transaction costs in order to effectively reach more microenterprise clients especially in rural areas.

With over 66 million mobile phone subscribers in the country and with the existence of two mobile money platforms (GCASH and SMART Money), the ability for banks to reduce operational and transactional costs and reach out to more clients is now being offered via m-banking..   Since early 2005, the MABS program has developed a full set of m-banking applications that utilize the GCASH platform that run on almost all basic mobile phones.   Services include person-to-person money transfers, international and domestic remittances, micro loan disbursements and payments, deposits and withdrawals, payroll services, bill payments, and the ability of merchants to buy and sell products using GCASH while facilitating remote deposit and cash-out services at accredited rural banks. Over 70,000 clients have been registered by accredited banks and plans are to reach out to more than 500,000 clients and customers over the next three years. M-banking transactions tripled in 2006, 2007, and again in 2008. There is now a huge opportunity to expand m-banking for microfinance through RBAP's recent partnership with SMART (with almost 35 million subscribers) as well as renewed support and commitment from Globe (with almost 25 million subscribers). There are also plans to expand m-banking services to include automated message alerts, loan payment reminders, and other services through an SMS gateway.

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