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Smart powers delivery of country's first fully mobile microfinance services

Wireless services leader Smart Communications, Inc. (Smart) announced that it would soon power the country’s first microfinance bank fully utilizing mobile technology, which will deliver convenient services to Filipinos with little or no access to the formal banking system.

During the GSMA NFC & Mobile Money Summit held recently in Italy, Smart Financial Services Head Tricia Dizon said Smart will support the PLDT-Smart Foundation, mobile microfinance holding company mBank Holding, Finnish development finance company Finnfund, and Dutch development bank FMO in launching mBank Philippines, which will provide members of the low-income population with savings and loan products exclusively on a mobile platform.

“Seven out of 10 Filipinos do not have an account at a formal financial institution mainly because of steep deposit requirements and the absence of banks in remote areas. But almost all Filipinos have a mobile phone. By launching a mobile microfinance facility, we will be giving the unbanked access to savings products and bank loans that can help improve their lives,” Dizon said at the sidelines of the summit.

Pilot services are already being offered by mCompany, a non-government organization whose operations will spin off into mBank Philippines once the Bangko Sentral ng Pilipinas approves its application for a formal banking license.

“By offering simple and effective financial services, mCompany and eventually mBank seek to increase financial inclusion and ensure that people have enough money at any given moment,” Dizon said.

Once mBank is launched, Smart and Talk ‘N Text subscribers will be able to open a savings account with the help of mBank field agents deployed in their communities. Activated account holders can apply for a loan product that interests them, immediately get a response about their application, and select a weekly repayment schedule – all via their mobile phone.

“The process eliminates the need to travel far to deposit and withdraw money, apply for loans, and pay amortization. This is very convenient especially for those who cannot afford to be absent from work or leave their sari-sari stores,” Dizon said.

mBank will operate a very advanced credit risk management capability delivered by Experian, the global leader on credit risk management automation.

“We believe this is the right way to go to drive financial inclusion in the countryside. In our Leyte pilot, we started offering the product on September 26, 2012. By October 16, mCompany  already had 110 account holders and had already disbursed P265,700 in loans to Smart subscribers,” said Arnaud Ventura, board director of mCompany and co-founder of mBank Holding.

Smart has a proven track record of partnering with relevant social business enterprises to create sustainable financial solutions and services for the unbanked and underserved. These include Hapinoy with MicroVentures and CARD-MRI, and the Islands Activations Program with SeedFinance. Both projects have received significant international awards and commendations.

Smart was recently tapped by the United States Agency for International Development (USAID) for its Scaling Innovations in Mobile Money (SIMM) project which seeks to boost mobile money transactions in the country using Smart Money. Smart is also the only Philippine telecommunications company to receive a Mobile Money for the Unbanked (MMU) Fund Grant from the GSM Association.

For its efforts to provide underserved markets with communication and microenterprise opportunities, Smart also received the Best Mobile Money Service award at the 2009 Asian Mobile Awards held in Hong Kong, and the 2008 World Business and Development Award given by the International Chamber of Commerce, Prince of Wales International Business Leaders Forum, and United Nations Development Programme in New York.

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