Executive Summary

The Microenterprise Access to Banking Services (MABS) Program was designed to address the need of the Philippine microenterprise sector and other low-income people to gain access to a wide range of financial services and ensure that all sectors of society can participate in a growing economy. The program oversight continued to be led by the Mindanao Development Authority (MinDA) under the Office of the President. Altogether, the MABS program spanned 15 years, beginning in 1997 and closing in 2012.

In 1997, the MABS Program introduced a new approach to delivering microfinance services in the Philippines, an approach grounded in international best practices tailored to the needs of Filipinos in rural areas known as the MABS Approach. This approach was based on careful market research and pilot testing to ensure that products were suited to client needs. The program helped rural banks introduce new savings and loan products for microenterprises and small-scale farmers and applied innovative technologies such as mobile phone banking to expand the frontier of financial services delivery. In the fourth phase of the program starting in 2008, the MABS Program helped develop new microfinance services, including microinsurance and housing microfinance.

As in the earlier phases, the program did not provide loan funds and encouraged banks to focus on a deposit mobilization strategy for raising funding instead of relying on government loans or loan guarantee programs. MABS also leveraged the involvement of government and private sector partners in achieving its milestones. In particular, the Rural Bankers Association of the Philippines (RBAP) provided counterpart resources and full access to its membership base to enable the program to provide technical assistance to a wide array of rural banks. All participating rural banks were required to invest and contribute time, money, and resources for MABS provided training and technical assistance.  This helped to ensure appropriate buy-in and commitment from the senior management of partner rural banks. It also helped to ensure a commercial, demand-driven approach that made the MABS program successful and contributed toward the ongoing sustainability of the program under the leadership of RBAP.  In addition, the MABS program was able to leverage scarce USAID funding with support from a range of local and international companies

To expand and sustain rural banks’ involvement in microfinance, MABS also supported RBAP’s advocacy work with several regulatory bodies and other agencies to promote a proactive and positive policy and regulatory environment including close working relationships with the Bangko Sentral ng Pilipinas (BSP) and the Insurance Commission of the Philippines. MABS also assisted RBAP in its support for the Credit Information Systems Act as well as collaborating with the Bankers Association of the Philippines Credit Bureau to promote better use and adoption of credit information sharing services.

With the support provided by MABS, 322 rural banks received technical assistance and training in a range of microfinance services including microinsurnace and mobile phone banking by June 2012.[1] These banks have disbursed more than 3.2 microfinance, microagri, and housing microfinance loans totaling more than 44 billion PHP (more than $960 million) and were managing more than 1.4 million microdeposit accounts with balances of 2 billion PHP (more than $48 million). Most banks were able to generate almost all the loan funding they needed from their savings mobilization efforts and private sources of funding.

USAID’s MABS Progam accomplishments (2008-2012) are highlighted in the chapters that follow. Chapter 1 describes the role and importance of the private partnerships that served as the cornerstone for the MABS program. Chapter 2 analyzes the importance of the policy and regulatory environment and the role of MABS in supporting developments during the past four years. Chapter 3 summarizes the MABS Approach to developing microfinance services.  Chapter 4 documents the efforts to promote savings mobilization strategies. Chapter 5 details the work of the program in focusing on mobile phone banking services and other technologies to expand outreach to more clients. Chapter 6 describes MABS’ role in developing housing microfinance products. Chapter 7 focuses on the program’s support and development of the microinsurance services of rural banks. Chapter 8 reviews development of the microagri product. Chapter 9 highlights overall achievements, and the final chapter offers insights and ideas about lessons learned and areas that should still be supported to continue to promote greater financial inclusion in the Philippines.[2]


Exhibit 1. Participating Bank Units as of June 2012

Exhibit 2. MABS Program Impact on Microloans & Microdeposits 1998-2012

Year

Participating bank units

New microloan clients

Microloans disbursed

Microloans disbursed (million pesos)

Outstanding microloan portfolio (million pesos)

Outstanding microdeposit balance (million pesos)

1998

4

447

85

0.50

0.30

0.09

1999

14

3,741

4,143

26

7

12

2000

42

10,067

21,155

172

53

171

2001

75

23,360

70,953

645

129

336

2002

104

37,549

102,890

1,097

225

541

2003

117

36,138

115,058

1,360

317

567

2004

204

62,539

159,955

2,019

525

1,002

2005

264

71,145

208,621

2,889

632

1,104

2006

320

87,461

254,633

3,224

921

1,578

2007

358

134,023

408,397

5,226

1,468

1,688

2008

529

130,532

415,771

5,747

1,603

1,831

2009

573

104,211

401,540

5,414

1,696

1,930

2010

584

123,885

441,538

6,149

1,963

2,023

2011

626

141,241

454,155

6,528

2,108

2,087

June 2012

643

52,844

209,122

3,334

2,179

2,085

Cumulative

1,019,183

3,268,016

43,831

Exhibit 3. MABS IV Program Impact Summary Table June 2012

Phase 4: 2008-2012
Indicator

Target

Actual

  1. Bank units receiving MABS’ technical assistance

630

643

  2. Cumulative microborrowers served

950,000

1,019,183

  3. Cumulative microloans disbursed (in billion pesos)

42.27

43.1

  4. Cumulative new microdepositors served

900,000

896,162

  5. Rural bank clients registered to use mobile phone banking services

390,000

390,035

  6. Bank branches offering mobile phone banking

975

1,171

  7. Value of monthly mobile phone banking transactions (in million pesos)

550

743.6

  8. Bank branches offering microinsurance

125

158

  9. Active persons covered by microinsurance

150,000

427,158

  10. Bank branches offering microhousing loans

50-100

83

  11. Cumulative number of microhousing clients

4,000

4,005

  12. Cumulative number of bank branches offering the microagri-loan product

90

67

  13. New microagri-loan product clients

31,700

26,135


[1] The 322 rural banks include all banks that received training or technical assistance from the MABS program in the areas of microfinance, micro-agri loans, housing microfinance, mobile phone banking, and/or microinsurance.  (See Annex C. Inventory of Banks and Products.)

[2] To view a video on the MABS program’s 15 year history and impact look for the video “Bank On It” on the DVD or online at http://youtu.be/n-Zo2tx1FDo

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3 thoughts on “Executive Summary

  1. Pingback: Full Report | INNOVATING MICROFINANCE IN THE PHILIPPINES

  2. Pingback: Full Report | INNOVATING MICROFINANCE IN THE PHILIPPINES

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