BENEFICIARIES of the so-called Pantawid Pamilyang Pilipino Program (4Ps) are enjoying the fruits of a business model that arose from a felt need: How to help the great majority of the people who live in areas with few banks or none at all. This is what defined the business of Electronic Network Cash Tellers Inc. (Encash), which is having a financial impact on places where it has ATMs. Now, residents of a far-flung place who used to travel far and spend much for them to access their money through ATMs in the cities, just withdraw their money within their localities.

Encash’s ATM network is now the second-largest in MegaLink, second only to Banco de Oro. In May it received an award as the Top Onsite ATM for its ATM deployment in GM Bank from the MegaLink consortium. It was given during the annual MegaLink Performance Award on May 24. The awarding ceremony was held at The Anvil, BDO Corporate Center in Makati City.  

Eric J. Severino, Encash president, said, “We are happy that our efforts have been recognized by MegaLink. We commit to continue with our mission to serve the Filipino community.”

Just three years after it started, Encash has expanded its network to 300 ATMs in the rural areas—a feat by any standard. And now, it has deployed more in what could be a portent of things to come.

The company is now in deep talks with a so-called social investor from Europe who will pump in an investment into the ATM deployer. A social investor is one who puts in money in an enterprise that has a social value. This is distinct from an investment where profit is the main motive.

The business model ensures that it provides convenience for all. Cardholders are charged a minimal convenience fee, which is considerably less than what they spend to reach the nearest ATM in the city or the largest town. The convenience fee is then shared between Encash, its rural bank and cooperative partners, as well as MegaLink and the banks that issued the ATM card.

Encash continues to cement partnerships with other entities in order to expand its operations and continue with its vision to provide remote communities with access to their finances.

Since hitting its 300th ATM milestone in June, it has added 27 more ATMs in partnership with rural banks and cooperatives that are just as glad to be a part of a growing business. “This is a feat that only a few banks have achieved,” said Encash President Severino, who earlier broached the possibility of conducting its own IPO (initial public offering) during celebrations for its 300th ATM deployment in just three years.

Now a partner of 149 rural banks and cooperatives, the company’s recent deployments took place in Irosin, Sorsogon, through the company’s partnership with the Agricultural and Rural Development for Catanduanes Inc. and with the Rural Bank of Benito Soliven in Isabela.

Encash has also launched its own ATM Savings system. Recently, the company installed the system in Gata Daku Multipurpose Cooperative in Clarin, Misamis Occidental. It took Encash’s two-man team a total of six days to get the system up and running, as well as to train the staff.

Just like the Caritas Diocese of Libmanan—another Encash IAD and ATM Savings partner—Gata Daku MPC can now issue its own ATM Savings cards. This means that members of a community without a bank can now have their own ATM cards; access their finances via the Encash ATMs and through other banks under the MegaLink, Expressnet and BancNet consortia, and enjoy a lower cost to receive the remittances sent by their overseas Filipino workers relatives.

The private ATM deployer has so far benefited from the government’s conditional cash-transfer program. When the government through the Department of Social Welfare and Development implemented the 4Ps or the poverty alleviation program, the P1,400 monthly allowance per family provided much-needed relief for them.

The spread of Encash ATMs has given added benefits to the recipients of the government’s poverty alleviation program. For Vilma Jun, a 28-year-old Badjao housewife from the town of Labason, for instance, the government allowance was a welcome addition for her family. But according to Vilma, she had to travel two hours to Sindangan in order to get the money from the nearest ATM and this proved to be not only daunting but expensive.

However, with the deployment of an Encash ATM in the Rural Bank of Labason, Vilma gave a simple and heartfelt comment in the dialect. “Ahap na maitu Labason kulang gasto kami. Habal na magsakay Sindangan.” (“Now that it [the ATM] is already here in Labason, I will not be hiring a motorcycle to go to Sindangan.”) Currently there are 62,000 identified 4Ps beneficiaries from 26 towns in Zamboanga del Sur who are not served by government and commercial banks.

As a general rule, Mindanao is primarily served by cooperatives, with commercial and rural banks in key urban centers. This means that people like Vilma would be forced to travel to be able to get the allowance from government banks like the Land Bank of the Philippines. Thus, money is not maximized for the family’s needs because of the travel expense. This is where the Encash ATMs play a significant role.

Security Bank’s enduring thrust

Security Banking Corp., the country’s No.1 bank in terms of return on equity (ROE), gives a glimpse of its enduring thrust on profitability, with another economic forum that would allow ordinary mortals like us to have a handle on the current economic crisis playing out in other lands. This forum, set today at the Makati Shangri-La Hotel, is what makes the bank, a “diamond in the rough,” so to speak, with the way it reaches out to explain fully what now ails the world and how best can we cope in these uncertain times.

The for-invitation-only affair seeks to define the boundaries of the financial turmoil with three experts explaining the crisis now playing out. With the forum, one gets to know the full import of the economic crisis and how it impacts on us. This is what possibly defines the bank’s continuing profitability, year in and year out: understanding the dynamics of the financial game.

Kudos to the bank’s president, Abet Villarosa, who is hands-on on the treasury operations of the bank, which understandably is what delivers the bank’s huge profit margins. In a way, the bank’s chairman and biggest shareholder, Frederick Dy, has a big contribution to the success of the bank as he allowed the professionals to run it. At one such forum, he told us that he does not meddle in the bank’s affairs, as the officers are better equipped to deliver the required financial results. No wonder, the bank is raking it in at more than 20-percent ROE.

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