By Aditya Banerjee
This is the second of a four part series of articles about the RBAP-MABS National Roundtable 2012 Conference panel session entitled “Using New Channels to Expand Microfinance Services”.
Rural banks already play a big role in small communities. They serve over one million low-income families who place their trust – from microinsurance to loans to savings and other crucial banking services that help them build a financial foundation to support themselves and their families. Already, rural banks and their clients have a strong relationship – but there are challenges that Microfinance Opportunities (MFO) hopes to address. One is building awareness amongst banks, cash-in/cash-out partner merchants and clients of the benefits of mobile phone banking services and two, ensuring that banks maintain a close and continuous relationship with their clients and seeing to it that they are updated on the various new services that will make their financial lives easier and more productive.
Launched in June 2010, the Financial Education for Branchless Banking Project is implemented by the Rural Bankers Research and Development Foundation Inc. (RBRDFI) and the USAID-supported Rural Bankers Association of the Philippines-Microenterprise Access to Banking Services (RBAP-MABS) Program with support from MFO, a Washington-based global nonprofit organization that develops consumer-focused ideas and solutions for the microfinance industry. The project, which is implemented in partnership with The MasterCard Foundation, aims to increase the uptake and use of mobile phone banking services through the use of financial education tools. The project also seeks to build awareness of mobile money in the Philippines, and to encourage consumers to develop healthy financial management habits through mobile banking services through behavior change communication. Three pilot banks – 1st Valley Bank, Cantilan Bank, and GM Bank – implemented the project from November 2011 through May 2012.
During the National Roundtable Conference of the RBAP-MABS Program last June 8, 2012, MFO Research Officer Mr. Craig Tower presented the preliminary results of the outcomes assessment of the project. Through the three pilot banks, the consumer education campaign is anchored on the central goal of increasing uptake and use of mobile banking services via mobile money. The program has four elements: first, to raise awareness of mobile banking; second, to provide direct training to merchants and bank staff on how to sell the service; third, to help encourage and promote usage of the service; and fourth, to provide reinforcements through reminder text messages and consumer education tips.
Mr. Tower also discussed how the relationship between bank staff, merchants, and the clients requires careful training and constant follow-up in order to leverage the capability of mobile money services to lead to better financial management by the clients. For example, a lot of new clients require repeat exposure, as mobile banking tends to taper off even though uptake is generally high. To ensure that clients continue to use the service, bank staff must market, build trust and partnerships, have focused messaging and facilitate knowledge transfer to the market. Banks also have to ensure that they address certain operational issues such as increasing cash-in and cash-out outlets, short operating hours, and network outages which can have a severe impact on the effectiveness of consumer education.
Ultimately, in order for bank clients to manage their finances appropriately and to harness the absolute power of mobile banking, bank staff members are required to help nurture, train and constantly engage clients. Clients who learn to effectively use mobile banking services will grow to appreciate it, and will also engender a stronger sense of loyalty to rural banks as well.