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Providing an Enabling Regulatory Environment to Enhance Access to
Finance for MSMEs.
A Joint Regional Symposium: "Best Practice Regulatory Principles A Joint Regional Symposium: "Best Practice Regulatory Principles Supporting MSME Access to Finance" 27-28 June 2011Supporting MSME Access to Finance" 27-28 June 2011
Mary Rose A. Contreras Core IT Specialist Group
Supervision and Examination Sector
AGENDA
Current Financial Landscape and Mobile Penetration
E-Money and Business Models
E-money: Enhancing MSMEs access to finance
Creating an Enabling Environment with Proportionate Regulations
Tasks Ahead
99% mobile phone coverage
KBs, TBs, RBs and 9000 ATMS are located in cities and big towns
26% of Filipinos have access to formal financial channels
More than 75% of the population have mobile phones
610 out of 1635 municipalitiesdo not have banks
2B text messages/day
90M Population
Financial Landscape & Mobile Penetration
CIRCULAR 649 – Guidelines on E-Money Issuance and Operations of E-Money Issuers
Monetary value Monetary value as represented by a claim on its issuer, that is –
a. Electronically stored in an instrument or device;
b. Issued against receipt of funds of an amount not lesser in value than the monetary value issued;
c. Accepted as a means of payment by persons other than the issuer;
d. Withdrawable in cash or cash equivalent; and
e. Issued in accordance with BSP Circular No. 649 dated 9 March 2009
Redeemable at Face Redeemable at Face ValueValue
NotNot a Deposit a Deposit
Total loaded cash value not to Total loaded cash value not to exceed exceed P100 thousand/monthP100 thousand/month
Compliant with Compliant with AMLAAMLA
Electronic MoneyElectronic Money
BasicBasicFeaturesFeatures
Forms of E-MoneyForms of E-Money
Prepaid Cash CardsPrepaid Cash Cards
Electronic WalletElectronic Wallet
ACCREDITED REMCO
OUTLET
Remittance
-11h -10h -09h -08h -07h -06h -05h -04h -03h -02h -01h00h
+01h +02h +03h +04h +05h +06h +07h +08h +09h +10h+11h
Expanding Financial Access Through Innovative Technology
Purchase of Goods
Payment of Fare
Banking Products- Deposits- Loans- Bills Payment
Utility Bills Payment
Payment of School Fees
Payment of Taxes and
Licenses
Person-to-Person
Transfer
E-money: Enhancing Access to Finance for MSMEs
• Loan Release• Loan Payment• Deposit Build-up
Loan Release
1 Upon loan application, client already indicates his e-money/e-wallet account number
2 Upon loan release, client shall receive an SMS notification on the credited loan proceeds to e-wallet
3 Client can go to any Cash Out center to convert electronic money to actual cash
Loan amount has been credited to
XXXXXXXXXX0005. Thank you for using this
service
Loan Payment
1 Client chooses loan payment from menu, enters the amount to be paid, enters his PIN to authorize the transaction
2 Client and the lending bank shall receive an SMS notification upon fund transfer from client’s e-wallet to lending bank’s e-wallet
3 Lending bank records the loan payment made in step 2
Amount of P100 has been transferred
to/from XXXXXXXXXX03452.
Thank you for using this service
Deposit build-up
1 Client chooses text-a-deposit from menu, enters the amount, enters his PIN to authorize the transfer of e-money value from his wallet to bank’s wallet
2 Client and the depositary bank shall receive an SMS notification upon fund transfer from client’s e-wallet to depositary bank’s e-wallet
3 Depositary bank records the amount to the client’s deposit account.
Amount of P100 has been transferred
to/from XXXXXXXXXX03452.
Thank you for using this service
Benefits to UsersBenefits to Users
Reduced travel time & costReduced travel time & cost
Reduced riskReduced risk
ConvenientConvenient
AvailabilityAvailability
Time savingTime saving
1.1. Allow non-banks to offer e-moneyAllow non-banks to offer e-money2.2. Remittance Agents allowed to perform Remittance Agents allowed to perform
Cash-In/Cash-OutCash-In/Cash-Out3.3. Simplification of requirements for KYCSimplification of requirements for KYC4.4. Formalized guidelines on issuance of Formalized guidelines on issuance of
electronic moneyelectronic money5.5. Allowed microfinance-oriented OBO Allowed microfinance-oriented OBO
limited transactional banking activitieslimited transactional banking activities
Creating an Enabling Environment with Creating an Enabling Environment with Proportionate RegulationsProportionate Regulations
Latest BSP Regulatory Initiatives• Circular 649 (January 2009)- Regulating the issuance
of electronic money – Definition of e-money and EMIs– EMI as the supervised entity of Bangko Sentral– Qualification standards of both bank/ non bank
issuers such as Capital, Risk Management and Liquidity Cover
– Compliance to AML rules– Consumer protection standards including Adequate
Disclosure
Latest BSP Regulatory Initiatives• Circular 704 (December 2010)- Electronic Money Network
Service Providers (EMNSP)– Smaller banks aiming to be EMIs can engage services of EMNSP – Stressed Due Diligence and Continuing Operational Review
• Circular No. 706 (January 2011) – Updated AML rules and regulations– Reduced due diligence for low risk clients– Reliance on third-party KYC
• Circular 694 (October 2010)- Microfinance-oriented other banking offices (MF-OBO)– MF-OBO can perform limited transactional banking
activities: micro-deposits, release micro-loans, etc.
TASKS AHEADTASKS AHEAD
Success breeds new challenges and risks.
Steady advocacy for responsible financePrice transparency Consumer Protection
Close monitoring of market practices and developments
Financial literacy promotion
End of Presentation.
Website: www.bsp.gov.ph
E-mail address:mrcontreras@bsp.gov.ph