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Cantilan Bank Celebrates 30 Years of Progressive and Excellent Community Banking Services

More than 500 attendees packed into a basketball gymnasium in Cantilan’s town square to celebrate the 30th anniversary of Cantilan Bank. The gala highlighted the banks remarkable growth over the past three decades and underscored the important role microfinance services played in their success.

MABS started working with Cantilan Bank 11 years ago, when it had just three branches and 35 employees. Now, the bank is 260 employees strong with 12 branches across Surigao. The bank-wide loan portfolio grew from around P50M to P652M. The number of microfinance borrowers is 39% of Cantilan’s total borrowers with a client base of over 8,400 hard-working microentrepreneurs, small farmers, and store owners. The number of deposit accounts is 58,522 with P524M in deposits. More importantly, there are 3 depositors to every borrower, and voluntary savings by micro-depositors comprise 50% of total microloans outstanding. Indeed, the bank has grown drastically by continuously evolving …

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MABS Tips

Credit Scoring System, Netbooks, and new Mobile Phone Banking App introduced at the RBAP-MABS National Roundtable

Several technological developments for support and expansion of microfinance services were presented during the 2010 RBAP-MABS National Roundtable Conference held in Manila on June 2-3, 2010.

Ms. Rebecca Hughes, Philippines Country Director of Innovations for Poverty Action (IPA), first introduced a credit scoring model and automated loan application process via netbooks. The new loan application process via netbooks allows loan Account Officers to quickly and easily upload and prepare loan applications from the field. In addition, IPA has also added a credit scoring system into the application to better predict the borrower’s likelihood of repayment based on certain indicators such as the borrower’s background, cash flow, debt capacity and past repayment patterns of comparable borrowers. For the staff and clients, the netbooks help speed up the processing of loan applications in the field.

While Ms. Hughes cautioned that not every bank will be able to implement the credit scoring system …

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MABS FeaturesSuccess Stories

Mobile phone banking merchant partners help ease banking in Surigao

A growing number of store owners are collaborating with rural banks and connecting to the GCASH network from Cantilan to Butuan City and across the region. These store owners are providing cash-in and cash-out services to support mobile phone banking services as well as mobile money transfer in these areas.

The partnership between RBAP-MABS and G-XChange, Inc. (GXI), Globe Telecom’s wholly owned subsidiary, has helped develop and implement mobile phone banking applications and m-commerce services for rural banks and their clients.  Based on a secure GCASH menu, mobile phone banking clients of accredited rural banks can receive loans, make payments and deposits, withdraw funds from their deposit accounts, receive money from relatives and friends, and even buy and sell goods remotely via GCASH.

Merchant-partners provide the opportunity for rural bank clients to conveniently deposit cash into or withdraw cash from their mobile wallets.  While rural banks in turn help to …

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MABS FeaturesSuccess Stories

Accounts of Housing Microfinance Clients

During a visit to Cantilan Bank, a team of MABS employees had the opportunity to observe first-hand how housing microfinance loans have impacted the bank’s clients.  Many microfinance clients own their homes, and often have a need to make incremental repairs or improvements using whatever funds they may have saved over time if they have no access to credit.   Housing microfinance loans generally mirror the way low-income households build or improve their homes in the countryside, which follow a progressive building approach.  Clients often build a foundation then the walls, then add roofing, and include water, sanitation, and electricity, step-by-step. MABS participating rural banks follow the approach that clients take to home improvement and home building in the housing microfinance loan products they offer to their clients.  While loans are slightly larger and longer term than typical microenterprise business loans, they are still paid back in periods of 12 months …

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MABS Highlights

Delegates from Pacific Islands study Philippine mobile phone banking

A joint study group of 9 members from the Alliance for Financial Inclusion (AFI) and the Pacific Island Central Bankers visited the Philippines on June 21-23, 2010 to learn about Philippine mobile phone banking. Specifically, they were interested in the regulatory approach adopted by the Bangko Sentral ng Pilipinas (BSP) for its successful implementation.

RBAP-MABS, a USAID-supported program, presented to the study group its experiences with rural banks and microfinance clients in developing and implementing its mobile phone banking initiatives using the GCASH platform. The RBAP-MABS team also shared the lessons learned over the past 5 years or so of experience. To date, there are already 62 rural banks with 906 branches offering mobile phone banking services to their clients in the countryside.

The study tour, led by Ms. Alyson Slater from Alliance for Financial Inclusion (AFI), is composed of officials from the Reserve Bank of Fiji, Central Bank of …

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MABS HighlightsMicroinsurance

Lower taxes on life insurance to boost microinsurance in the Philippines

Clients interested to access microinsurance services may now celebrate another legal development that allows for more affordable life insurance products with the recent signing of Republic Act (RA) 10001, which reduces taxes on life insurance premiums.

Under this new law, the tax rate for total premiums collected has been scaled down to 2% from the previous rate of 5% stated in Section 123 of the National Internal Revenue Code of 1997. The new law also provides for a revised documentary stamp tax scheme.

“It is expected that life insurance companies will reflect such reductions in the premiums … after the law becomes applicable”, Philippine Life Insurance Association (PLIA) President Mabini L. Juan said. “RA 10001 becomes effective only after 15 days from publication and after the issuance by BIR of the Implementing Rules and Regulations (IRR)”, he added.

R.A. 10001 for rural banks

In a report by the Business World, …

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Latest UpdatesMABS Highlights

GCASH and Guagua Rural Bank Formalize Partnership

Guagua Rural Bank (GR Bank) officially joins the Philippine mobile phone banking community as it formalized its partnership with G-Xchange Inc. in utilizing the GCASH platform to facilitate its mobile phone banking services (MPBS).

Developed under the Rural Bankers Association of the Philippines-Microenterprise Access to Banking Services (RBAP-MABS) program, MPBS involves the use of mobile phones in performing bank transactions such as deposits, withdrawals, remittances and loan payments, among others.

Facilitated by the USAID-supported RBAP-MABS program, GR Bank signed a memorandum of agreement with G-XChange, Inc., Globe Telecom’s mobile commerce subsidiary, on February 18 during the Central Luzon Federation of Rural Bank Management Conference in Hotel Stotsenberg, Clarkfield, Angeles City, Pampanga

With this partnership, GR Bank will utilize GCASH to expand its banking operations. Initially, the bank will accommodate cash-in and cash-out and GCASH Remit services.  With these new services available to its banking clients, GR Bank can now further …

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MABS Highlights

India’s Bankers Institute of Rural Development (BIRD) studies Philippine microfinance

Eight officers from India’s Bankers Institute of Rural Development (BIRD), along with two officers from the Agricultural Credit Policy Council (ACPC), visited the Philippines on February 8-13 to study the country’s microfinance industry.

Facilitated by the Rural Bankers Research and Development Foundation, Inc. (RBRDFI), the study tour introduced the participants to the Philippine microfinance industry’s best practices and innovative technologies. It included visits to the Bangko Sentral ng Pilipinas (BSP), People’s Credit and Finance Corporation, Land Bank of the Philippines, Center for Agricultural and Rural Development-Mutually Reinforcing Institutions (CARD-MRI), Cooperative Rural Bank of Bulacan, and the Rural Bankers Association of the Philippines-Microenterprise Access to Banking Services (RBAP-MABS).

RBAP-MABS presented the training and technical services that it provides to its participating banks, as well as its innovative contributions to the country’s microfinance industry.

Established in 1983 by India’s National Bank for Agriculture and Rural Development (NABARD), BIRD is an institute which …

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MABS Highlights

RB Angeles holds first Microfinance Credit Committee Meeting

Having completed the MABS Approach training and technical services course, Pampanga-based Rural Bank of Angeles (RBA) is now offering microfinance loans to microenterprise clients in various markets in Pampanga.  The bank held its first Microfinance Credit Committee meeting and released its first wave of loans in January to jumpstart its microfinance operations.

According to RBA President Robin King, the bank believes that “the MABS Approach to Microfinance emphasizes basic banking principles of knowing your customer well; finding out what their financial needs are; and in micro-lending, making sure that cashflow supports the loan structure rather than any form of collateral or support,”

He added that “based on market surveys in the areas where RBA branches are located, there appears to be a good market for microfinance. … RBA is intent on tapping this market extensively before venturing out to other areas.”

With the support and expertise provided by its new …

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MABS Features

RBAP plans for big time mobile phone banking services expansion this 2010

The Rural Bankers Association of the Philippines (RBAP) projects a substantial increase in mobile phone banking services this year as G-Xchange, Inc. (GXI) plans to activate Globe Telecom’s nationwide sub distributer network of over 18,000 cash-in and cash-out outlets.

Combined with the mobile phone banking services developed by USAID-supported RBAP-MABS program, this will provide the rural banks with a virtual ATM network that more than doubles the current count of about 8,000.  “We see this as an opportunity to leapfrog the rural banking sector’s outreach in the countryside and we are gearing up to accomplish this in 2010,” said RBAP President Joseph Omar Andaya.  

RBAP also has an application pending with Bangko Sentral ng Pilipinas (BSP) to utilize its own closed-loop merchant network. This network will provide cash-in and cash-out locations for RBAP banks’ clients in areas that the sub distributor network does not reach. “We are confident that we …

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