Opportunities for Rural Banks to Use Smart Money to Expand Branchless Banking Services

By Aditya Banerjee

This is the third 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.”

Mr. Jun Perez of SEEDFINANCE explained how their partnership with SMART in the Island Activation Program supports empowerment through mobile banking. SEEDFINANCE is a wholesale microfinance provider that works with retailers to provide financial and technical assistance. The Island Activation Program (IAP) specifically targets remote communities and helps develop mobile-based financial services in these under-served areas. The partnership among microfinance institutions, SMART, and SEEDFINANCE helps to enable island residents to utilize basic financial services including sending/receiving remittances, e-load purchases, bill and utility payments, and other micro-purchases. In March 2012, over 7,600 SMART Money Cards were released to clients via SMART Money Centers in seventy-one (71) rural communities.

SMART participates in the IAP by providing the technology and system for making mobile-money transfers possible. SEEDFINANCE helps rural banks and other institution get trained to become accredited by SMART so that these institutions can act as partners and take advantage of the SMART Money platform to assist their clients to make and accept mobile payments, ATM withdrawals, and send remittances via their mobile phone. SEEDFINANCE also offers training and technical assistance to microfinance institutions to help them to educate their clients on the practical uses of mobile banking and mobile money for day-to-day transactions.

Mr. Perez mentioned that the critical lesson learned from this initiative is that institutional preparation is the key to success, especially for interested banks and other financial intermediaries. Mobile banking is more than just texting and using a mobile phone – banks need to monitor liquidity and clients need to be educated to ensure that they are able to more fully use mobile money-enabled financial services to enjoy the benefits of using mobile money.

SEEDFINANCE is a licensed service provider authorized by the RBAP-MABS to conduct the RBAP-Smart Money Accreditation Training Course. They are collaborating with RBAP and SMART to expand the uptake and utilization of Mobile Phone Banking Services via the SMART Money Platform. Since the Bangko Sentral ng Pilipinas approval last March 2012 for rural banks to offer SMART Money-In Money-Out (MIMO) Services to their clients, two (2) regional training sessions have been conducted in Mindanao and Luzon. Forty-six (46) participants from twenty-five (25) rural banks have completed the training and were equipped with basic knowledge of SMART Money Services, back-end processes, and step-by-step procedures with a detailed checklist of requirements and templates.

Banks interested in Smart Money accreditation may contact Jun Perez at jremperez@seedfinance.net