Text to Repay

23 November 2010 at 01:53 4 comments

At a busy center[1] meeting, a woman waits, among 50 other women, for her turn to meet with her loan officer and make a weekly loan repayment. In a different village in the Philippines, one woman collects repayments from her 50 other center members, then travels the distance to the nearest commercial center to make the weekly repayment for the entire group at a bank. Now, imagine a scenario where a borrower can simply go to a retailer in her village and make her loan repayment by text message. Sound interesting?

In a rural area served by NWTF – where mobile banking could prove a useful solution for borrowers

At the Negros Women for Tomorrow Foundation (NWTF), where I began my Kiva Fellowship three weeks ago, this is the new proposition for borrowers at 6 of NWTF’s 44 branch offices. While the rollout of mobile banking is still in its very nascent stages at NWTF, mobile payment has distinct advantages over current forms of repayment. Repayment at center meetings can be lengthy with just one loan officer recording repayments for all members, drawing away from precious time which borrowers could spend at work or in training sessions with NWTF staff. Repaying at a bank in the closest town involves material travel cost and time for at least one of the center members. In the future, NWTF hopes that its mobile banking service will be able to offer clients even more than just repayments – with the potential for mobile loan disbursal, other bill payments, and remittances.

Mobile banking also holds appeal to the MFI. As repayments and loan disbursal take place through an automated mobile system, staff may one day no longer handle cash – reducing the risk of theft. In addition, repayments will be automated, eliminating the need to manually record all transactions and reducing operating costs.

The rollout of a new mobile system for repayments (and perhaps soon for other financial services) does, however, come with significant costs. New technology solutions were created to handle repayments, and sync to the current management information system. New processes were developed, which involved identifying and training village retailers, and training staff in repayment recording. And as old processes are habit, some resistance is always natural in adopting a new system. NWTF however has worked hard to attain “buy-in” from their branch staff – emphasizing staff benefits, and sending members of the special projects team to spend one month with each branch office as mobile repayments roll out.

In the Philippines, the mobile phone penetration rate is ~75%[2] . And the country has been heralded by many as the texting capital of the world. Within this environment, mobile banking and commerce can thrive. With banks, telecommunication companies, and MFIs all playing a role, the future of mobile banking in the Philippines appears bright, and I am excited to see how NWTF adapts its mobile services to better serve its clients.

NWTF’s special projects manager speaks to branch staff about the rollout of mobile banking at their branch

[1] NWTF utilizes the Grameen Bank microcredit methodology. A center, comprised of ~10 groups of 5 members each, meets weekly with a loan officer.

[2] http://www.itu.int

Joanne Gan is currently serving as a Kiva Fellow at the Negros Women for Tomorrow Foundation in Bacolod City, Philippines. While she is a late-adopter to most technologies, she is very excited to witness the mobile innovations at NWTF. To join the NWTF lending team, click here.

Entry filed under: blogsherpa, KF13 (Kiva Fellows 13th Class), NWTF (Negros Women for Tomorrow Foundation), Philippines. Tags: , , , , , , , , .

The beat goes on… The “non-cowards” of Monterrey – Los “no-cobardes” de Monterrey


  • 1. Fehmeen  |  26 November 2010 at 07:17

    If this product is implemented successfully, it can also help the unbanked population that doesn’t use microfinance service, which does wonders for the financial inclusion dream. POS terminals and mobile banking services grow quickly, and in some cases, more efficiently than MFIs themselves (as per a recent CGAP report). Look forward to hearing more details about this service.

  • 2. jgannz  |  23 November 2010 at 23:42


    Like Casey, I haven’t seen any mobile collection of social performance data in the Philippines. My MFI, the Negros Women for Tomorrow Foundation, also collects PPI (progress out of poverty index) data from their prospective and current clients through in-person interviews.
    I can see a lot of challenges to gathering social performance data without person-to-person contact particularly regarding the consistency of results (loan officers at NWTF are all trained in how to use poverty measurement tools like PPI), and validity of the data. That being said, I think mobile phone applications could be useful in data gathering and synching to a management MIS system…saving the staff the time of processing the paperwork involved.

    Would love to hear what you’re working on.

    – Joanne

  • 3. kivacharlie  |  23 November 2010 at 03:10

    Great! Just what I have been working on, except looking at mobile tech for collecting poverty/social performance data. Have you seen anything to this regard happening in the Philippines? I am currently looking at apps like FrontlineSMS. Obviously there are a lot of concerns about data validity and response rates, but in circumstances where end of cycle visits are not an option, they are the only solution I have come up with so far (besides phone calls). Would love to hear your input.

    KF in Kyrgyzstan

    • 4. Casey  |  23 November 2010 at 15:33

      Hi Charlie,
      What social performance data are they collecting? Can you give me examples of the types of questions?

      I haven’t seen anything like that here in the Philippines (they collect PPI data through in-person interviews) and would love to hear about how it works in Kyrgyzstan.

      Hope all’s well.

Get Involved!

Learn more about this blog and about Kiva Fellows

Visit Kiva.org

Apply to be a Kiva Fellow

Enter your email address to receive notifications of new posts by email.

Join 1,348 other followers


Drawing from the Field

Kiva Blog Policy

%d bloggers like this: