‘Sari-sari’ stores as agent banks?

by Jun Vallecera / Reporter

Wednesday, 22 April 2009 21:56

THE Bangko Sentral ng Pilipinas (BSP) is seeking legal opinion on whether they have basis for allowing third-party entities, such as sari-sari (retail) stores, to act as agent banks.

The plan, which includes such other agents as retail chain stores and government-owned post offices, forms part of the larger program of financial inclusion.

Financial inclusion, as the term suggests, ideally includes every Filipino to have access to financial services that often leaves out the rural-based population as farmers and fisherfolk.

Deputy BSP Governor Nestor Espenilla Jr. acknowledged it took them one year to convince authorities, the policymaking Monetary Board included, to sell the idea of the e-money, or electronic money popularized by Globe Telecommunication’s G-Cash product and by Smart Communication’s Smart Money.

The hardest thing about this product, according to Espenilla, was convincing everyone they were not deposits, which then complicates regulation.

“It took us a year to put it together, including the appropriate circular,” he said.

The same thing is happening about the plan allowing sari-sari stores, retail chains such as 7-Eleven and Mercury Drug Stores and various post offices to act as agent banks.

Under the plan, the neighborhood sari-sari store is empowered to help the financial inclusion program become reality by allowing it to act as cash centers where one can buy or encash so-called e-money.

Globe’s G-Cash centers and its equivalent Smart Money services are mostly urban-based products.

According to Espenilla, the Philippines is one of the leading proponents of e-money, along with Kenya and certain other Latin American countries like Brazil.

But the Philippines has a potential to become a pioneering entity in e-money transactions because most Filipinos own a cellular phone.

In Brazil, for instance, e-money usage is via points-of-sale, or POS, which is limited in nature, Espenilla said.

When approved, Filipinos may convert hard cash into e-money in any sari-sari store and send it via cell phones to pay for utilities charges, settle a personal debt or even make a deposit, he said.

“The question now is whether we can use third-parties like sari-sari stores to act as agent banks. We are in the process of seeking a legal opinion,” Espenilla said. He ruled out authorizing sari-sari stores as deposit-taking entities, however.

“I have problems enough monitoring the activities of regular banks, I don’t want added pressures at this point,” Espenilla said.