Providing an Enabling Regulatory
Environment to Enhance Access to
Finance for MSMEs.
A Joint Regional Symposium: "Best Practice Regulatory Principles
Supporting 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
Financial Landscape & Mobile Penetration
90M Population
26% of Filipinos have
access to formal
financial channels
KBs, TBs, RBs and
9000 ATMS are
located in cities and
big towns
610 out of 1635
municipalities
do not have
banks
More than 75% of the
population have mobile
phones
2B text messages/day
99% mobile phone
coverage
Philippine MAP
CIRCULAR 649 – Guidelines on E-Money Issuance
and Operations of E-Money Issuers
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
Electronic Money
Total loaded cash value not to
exceed P100 thousand/month
Basic
Features
Redeemable at Face
Value
Not a Deposit
Compliant with AMLA
Forms of E-Money
Prepaid Cash Cards
Electronic Wallet
Expanding Financial Access
Through Innovative Technology
ACCREDITE
D REMCO
OUTLET
Utility Bills Payment
Remittance
Purchase
of Goods
Banking
Products
- Deposits
- Loans
- Bills
Payment
Payment
of Fare
Payment of
School Fees
Person-toPerson
Transfer
-11h
-10h
-09h
Payment of
Taxes and
Licenses
-08h
-07h
-06h
-05h
-04h
-03h
-02h
-
+01h
+02h
+03h
+04h
+05h
+06h
+07h
+08h
+09h
+10h
+
E-money: Enhancing Access to Finance
for MSMEs
• Loan Release
• Loan Payment
• Deposit Build-up
Loan Release
Loan amount has been
credited to
XXXXXXXXXX0005. Thank
you for using this service
1 Upon loan
application, client
already indicates
his e-money/ewallet 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 Payment
Amount of P100 has
been transferred
to/from
XXXXXXXXXX03452.
Thank you for using this
service
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 ewallet
3 Lending
bank records
the loan
payment made
in step 2
Deposit build-up
1 Client chooses
text-a-deposit
from menu,
enters the
amount, enters
his PIN to
authorize the
transfer of emoney value
from his wallet to
bank’s wallet
Amount of P100 has
been transferred
to/from
XXXXXXXXXX03452.
Thank you for using this
service
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.
Benefits to Users
Reduced travel time & cost
Reduced risk
Convenient
Time saving
Availability
Creating an Enabling Environment with
Proportionate Regulations
1. Allow non-banks to offer e-money
2. Remittance Agents allowed to perform
Cash-In/Cash-Out
3. Simplification of requirements for KYC
4. Formalized guidelines on issuance of
electronic money
5. Allowed microfinance-oriented OBO
limited transactional banking activities
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 AHEAD
Success breeds new challenges and risks.
Steady advocacy for responsible finance
Price 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