With six (6) Micro Banking Offices opened in 2014, Postbank is establishing four (4) Microfinance Units (MFUs) in selected branches and six (6) Other Banking Offices (OBOs) in selected locations where there are existing post offices and/ or LGU offices.
The MFU will be a unit within an existing branch that will focus on providing financial services, initially micro-savings and micro-loans, to micro-entrepreneurs in the branch covered areas. Some 3-5 staff will be assigned to the MFU, who will report directly to the branch head. Two MFUs in Bicol and two in Pangasinan are planned to be established for 2015.
Initially, we have identified Sorsogon and Tigaon/Naga branches in Bicol, and Asingan and San Fernando, La Union branches in North Luzon for this purpose.
Aside from the MFUs, six OBOs are also planned for this year. Four will be in Bicol and two in Pangasinan. The OBOs are planned in locations with existing Post Offices or LGU offices where we can set up a table/chairs and signage to serve as marketing and information centers for the MFUs and MBOs. A staff will be tasked to man the OBO on a scheduled basis to receive and process loan applications, conduct orientations and other promotional activities.
Operating on a pilot basis, the MBOs so far initiated have started to yield important information in moving the project forward. For instance, many traditional perceptions of the rural market are proving to be negated by the limited experience so far–that banking transactions, especially on deposits and loans, cannot compete favorably with the common informal systems now prevailing in the rural areas, that the loans granted will be used for purposes other than intended, that repayment delinquency will be high and, generally, the customers are turned off by banking rules and regulations. On the other hand, countryside banking is characterized by a customer base with a culture/ behavioral profile that is unlike that of urban clients and requires adjustments in relating with them. Postbank staff have admitted to difficulties in dealing with them because of differing mindsets which make it difficult for them to relate with one another.
None of the above is as yet conclusive but it is hoped that by the end of 2015, more insights could be obtained which the subsequent MFUs could learn to increase the success rate of the project.