E-banking: Rural banks’ approach to financial inclusion

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Given the pervasive influence of mobile devices and wireless networks in this day and age, the rural banks recognize the role of these technologies in various aspects of our daily life, especially in trade and commerce.

Mobile devices and wireless networks’ ubiquitous availability and reach have already enabled innumerable possibilities. From effectively bridging the communication gap between people, mobile devices are now also seen as valuable tools in efficiently conducting banking transactions.

Just recently, the Bangko Sentral ng Pilipinas called for the support of banks and financial institutions in the establishment of electronic retail payments (ERPs) systems to expand the reach of financial services and to improve the savings habit among Filipinos.

The rural banks fully support this call and, in fact, have already started the utilization of mobile devices’ potentials years ago.


In 2008, the Rural Bankers Association of the Philippines (RBAP), in partnership with Microenterprise Access to Banking Services (MABS), pioneered the use of mobile technology to deliver microfinance services to the countryside.

Recognizing potentials of innovative technology and the fact that most people in the country already have mobile devices, RBAP-MABS has laid out projects to expand access to financial services.

Rural banks with mobile network giants Globe Telecom and SMART Communications, Inc. made banking services possible with the use of mobile phones–these include deposits, withdrawals, loans, loan and bill payments, remittances, salary disbursements and mobile commerce opportunities for small-scale merchants. The use and acceptance of mobile money and mobile money-enabled debit cards were introduced as well.

Mobile money-enabled debit cards such as GCash Debit cards and Smart Money MasterCard offered not only the convenience of accessing automated teller machines (ATMs) but also made cashless purchases possible in tens of thousands of Point of Sale (POS) merchants nationwide.

According to RBAP-MABS report, by end of June 2012, the number of rural banks branches that were accredited to offer mobile banking services using GCash and Smart Money reached 1,171 while registered mobile phone banking clients reached almost 400,000. Also, the rural banking industry has generated three million mobile phone
banking transactions that are valued at P17 billion.

In addition, data from the central bank showed that the ATM network of the rural banking industry has been increasing steadily. By end-March of this year, rural banks have 468 off- and on-site ATMs, a 35 percent increase from 347 recorded during the same period last year.

With most transactions—conventionally done in physical banking offices and at the mercy of long queues–efficiently brought within reach of clients’ hands, it is with no doubt that more people will be encouraged to learn financial management and later on transact with banks. More important and positively, the unbanked and underbanked sectors will soon be integrated under the umbrella that is financial inclusion.

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