BSP allows more micro-banking services

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) is further expanding the scope of allowable activities in micro-banking offices to further push financial inclusion.

BSP Deputy Governor Nestor Espenilla Jr. said the central bank is looking at allowing MBO to accept deposits from individual clients.

“It will move towards more liberalization. We will allow small savers to open an account. So what we are looking at is expanding their functionality,” he said.

The incoming BSP chief explained the regulator is set to allow commercial banks to put up MBO in areas where there is heavy traffic.

“For example, a commercial bank can put up an MBO in a market to get deposits from vendors and lend to vendors. They bring banking to where the business is, that is the concept,” he said.

The BSP earlier expanded the scope of allowable activities in MBOs to further boost government efforts in promoting financial inclusion. MBOs were allowed to complete the process of account opening from application up to the acceptance of initial deposit provided the necessary controls are in place.

A micro-deposit account has a maintaining balance requirement of not more than P100, with an average daily balance requirement not exceeding P40,000. This deposit account does not have dormancy charges.

Latest data showed the number of micro-deposit accounts grew 217 percent to 2.9 million accounts in June 2016 from just 925,389 accounts in June 2012.

In its latest financial inclusion report, the BSP said the growth in the number of MBOs has contributed significantly to improved access to and usage of financial services in the Philippines.

The BSP said financial access has expanded in terms of number and reach of banks and other financial institutions.

Usage of financial services has also improved as seen in the growth of deposits, loans, microfinance, and electronic money, it said.

“For access, worth highlighting is the growth in MBOs, which are low-cost banking infrastructure that can be established in municipalities where it is not feasible to set up a regular branch,” the BSP earlier said.

Regular branches continue to rise but they remain concentrated in Metro Manila.

MBOs have therefore been more contributory to financial inclusion by extending the reach of financial services to underserved and unserved areas.

It noted that majority of MBOs are located in areas outside Metro Manila, particularly in the regions of Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon), Bicol, Western Visayas, and Mimaropa (Mindoro, Marinduque, Romblon and Palawan).

“Most municipalities that were previously unbanked are now enjoying access to banking services because of MBOs,” the BSP said.

There are 617 MBOs based on the latest available count as of June 2016, an increase of 93 percent from 320 MBOs as of June 2012.

The number of local governments units (LGUs) with MBO grew 105 percent to 393 LGUs in June 2016 from 192 LGUs in June 2012. To date, 75 municipalities are being served by MBO alone.