Micro-banking offices (MBOs) are now allowed to perform the process of opening customer accounts, from application up to the acceptance of initial deposit, thanks to a new policy of the Banko Sentral ng Pilipinas (BSP) aimed to improve access to financial services of the micro-enterprise sector.
MBOs are scaled-down offices with a range of activities and services that include acceptance of micro deposits, disbursement of micro loans, selling of micro insurance, purchase of foreign currency, bills payment, government pay-outs and e-money conversion.
With MBOs, banks are able to expand outreach at lower costs. Monthly operating expenses have been estimated to be seven to eight times lower in MBOs than in a branch office.
MBOs used to perform the customer identification process and facilitation of account activation. However, the approval and actual opening of the deposit account used to be done only at the head office or branch. Thus, clients needed to go to the head or branch office to open a deposit account.
Banks can now take advantage of the opportunities presented by the new policy for MBOs.
The policy is expected to promote savings mobilization through micro deposits in MBOs. “Micro deposits, which are basic savings accounts especially designed for low-income earners, have maintaining balance of less than P100 and have no dormancy charges,” according to BSP.
As of end year 2015, there are 2.3 million such accounts amounting to P4.6 billion.