Knowledge sharing links Ecuador, Guatemala, Kenya & Philippines

28 0ctober 2010: Policymakers from Ecuador and Guatemala gained insight on harnessing the potential of mobile financial services from counterparts in Kenya and the Philippines.

AFI supported a two stop mission for policymakers from the Central Bank of Ecuador (CBE) and the Superintendence of Banks of Guatemala (SBG) to learn about the successful approach to mobile financial services and agent banking in both Philippines and Kenya. The study tour took place in October 2010 and focused on regulatory aspects, as well as the business models and the impact of those delivery channels, particularly in the remote areas.

In the Philippines, the visitors were hosted by Bangko Sentral ng Pilipinas and were able to hear directly from those involved in e-money regulation development, as well as meet private sector players leading the market. In Kenya, the Latin American delegation was hosted by the Central Bank of Kenya and used the M-Pesa case and new developments around agent banking in the country as a learning lab.

Mobile phone technology provides an opportunity to reach even the most rural areas and a sound e-money or mobile payments system in Guatemala could help support this initiative. The knowledge exchange provided an opportunity to understand the operational strengths and weakness of the mobile financial systems in Kenya and the Philippines and learn how the central banks have adequately addressed the regulatory concerns related to the reliability of the systems and consumer protection, as well as how they monitor providers. Kenya and Philippines also provide ideal learning cases for how to deal with agents – a key component in successful mobile financial service offerings thus far. The Superintendence in Guatemala is also engaged in other financial inclusion initiatives, such as working with the national government to implement a conditional cash transfer program, where transfers are deposited into new bank accounts. This helps unbanked people access basic financial services and links them to the formal financial sector.

Currently, in Ecuador, only banks are allowed to offer customers access to their bank accounts through mobile devices, but most institutions only offer these services over the web, for which, customers need a smartphone. Few banks are offering such services through basic SMS technology, which is the only one available to the great majority of Ecuadorians. The exchange visit to the Philippines identified features that could, for example, allow the use of mobile payment system for the management of microcredit schemes and the development of microsavings products.

Both delegations will apply lessons from the visit on enabling mobile financial services to their local realities and we look forward to notes on their progress.

More on AFI knowledge exchange programs.