Fourth Quarterly Report: Microenterprise Access to Banking Services Program Phase 4 (MABS-4)

The program aims to accelerate economic growth through expanded participation of lower income groups in productive activities. MABS-4 was launched in May 2008, and its overall objective is to substantially increase the level of banking services being provided to the microenterprise sector, and to lower socio-economic groups in general, by the rural banks and other banks in the Philippines. The program provides participating rural banks with the MABS Approach Training and Technical Services (MATTS) package, a systematic, step-by-step training and technical assistance package followed by rural banks as they develop the full capability to profitably provide loan, deposit, money transfer and other financial services to microentrepreneurs and low-income households. Since 1997, the MABS Program has provided training and technical assistance to 90 rural banks with more than 390 branches and 143 other bank offices to develop microfinance products and services. These participating banks have disbursed over 1.9 million loans totaling more than PhP23.4 billion to more than 614,500 new bank borrowers. These partner banks also manage more than PhP1.8 billion in small savings deposits from approximately 1.4 million micro deposit accounts. Technologies introduced by MABS, such as improvements to management information systems and performance monitoring systems, have helped banks manage their operations efficiently. Innovative technologies such as mobile phone banking services (MPBS) are now revolutionizing banking not just in the Philippines, but also in the microfinance sector worldwide. MABS has helped demonstrate that rural banks can earn profits and benefit society through microfinance. Despite these achievements, there are still many more Filipino microentrepreneurs without access to financial services. It is estimated that microfinance institutions are reaching only a third of over 4.0 million families who are engaged in micro business activities. To address this gap and to give more small entrepreneurs access to more financial products, USAID decided to support and implement the fourth phase of the MABS Program. The MABS-4 program has several key result areas, including the expansion of banks providing microfinance services, assistance to banks to extend the range of services, and sharing of lessons learned with global practitioners. The program has made significant progress in these areas, with participating banks expanding their services to include mobile phone banking, microinsurance, and microhousing finance. The program has also helped participating banks to improve their performance and efficiency, and has provided training and technical assistance to help them develop the capacity to provide microfinance services. The program has also made significant progress in terms of its performance, with participating banks disbursing over 1.9 million loans totaling more than PhP23.4 billion to more than 614,500 new bank borrowers. These partner banks also manage more than PhP1.8 billion in small savings deposits from approximately 1.4 million micro deposit accounts. The program has also helped to improve the efficiency of participating banks, with technologies such as mobile phone banking services (MPBS) revolutionizing banking not just in the Philippines, but also in the microfinance sector worldwide. The MABS-4 program has a workplan for the next quarter, which includes continuing to provide training and technical assistance to participating banks, expanding the range of services offered by participating banks, and sharing lessons learned with global practitioners. The program will also continue to monitor its performance and make adjustments as necessary to ensure that it meets its objectives.