Financial inclusion in the Philippines continues to remain low even before the disruption caused by the novel coronavirus (COVID-19) pandemic.
Financial inclusion, after all, involves more than just having a bank account. For the Philippines, inclusion means everyone has effective access to a wide range of financial products and services. Aside from savings, inclusion covers credit, payments, insurance, remittances, and investments.
As the health crisis eases, the BSP is expected to resume its mandate under Republic Act 11211, the new Central Bank Law, to promote financial inclusion and make financial services accessible at affordable costs to people and businesses regardless of their net worth and size.
“In the attainment of its objectives, the Bangko Sentral shall promote broad and convenient access to high quality financial services and consider the interest of the general public,” a section of the law reads.
The BSP relies on partners in the financial sector to carry out much of the work to achieve financial inclusion. In line with its mandate, the BSP has formulated new rules and regulations to make it easier for the sector to bring their products and services to more people, particularly the unbanked and unserved.
Banks, for instance, are offering accounts with low initial deposits and no maintaining balance. Other financial institutions are offering credit and other services at rates so much more manageable and affordable than those offered by informal lenders.
SB Finance is among the financial institutions that responded to the BSP’s call to pursue financial inclusion and promote financial literacy. SB Finance has developed and adapted its services to address the financial concerns of a much more diverse clientele.
A partnership between Security Bank Corporation and the Bank of Ayudhya (Krungsri) of Thailand, SB Finance offers retail loan products such as Hooloogan for those looking to buy phones gadgets and appliances, MotorsikLOAN for those looking to purchase motorcycles, as well as Car4Cash an OR/CR Sangla Loan and multi-purpose personal loans to pay for essential expenses and cover cash needs for education, business, and obligations. This is offered through zuki by sb finance a mobile app available on Android and iOS.
The company is actively positioning itself as the go-to-source for both financial services and advice, as it implements programs to improve Filipinos’ financial literacy, give them the ability to understand the pros and cons of a money decision, weigh the costs and confidently decide what to do. After all, people need knowledge and the right information to make the right choices.
Given its advocacy for financial inclusion and financial literacy, SB Finance signed an agreement recently with the Cebu Chamber of Commerce and Industry (CCCI). The consumer lender aims to offer itsservices to entrepreneurs, investors, and retail organizations in the island province to help sustain and enhance local businesses and support entrepreneurs in the provinces.
The agreement is aligned with CCCI’s commitment to conduct informative and engaging programs through its Go Invest Cebu initiative. SB Finance has been identified as a valuable in the success of the initiative.
Through this new initiative, CCCI hopes that Cebuanos will be kept abreast of various opportunities in entrepreneurship and local business potential and gain access to sustainable financing services that promote financial inclusion and business growth in the Visayas region.
Backbone of PH economy
CCCI has every reason to pin its hopes on financial inclusion and the growth of entrepreneurship to boost the development of the province and the Visayas. As statistics show, even modest business ventures make significant contributions to the Philippines’ growth and development. In fact, they seem to have a greater impact on the economy than big corporations.
Data from the Philippine Statistics Authority (PSA) showed that in 2020, before the COVID-19 pandemic, out of the total of 957,620 business enterprises in the country, 952,969 (99.51 percent) were MSMEs. Micro enterprises constituted 88.77 percent (850,127) of MSMEs, followed by small enterprises at 10.25% (98,126) and medium enterprises at 0.49 percent (4,716).
Together, MSMEs created 5,380,815 jobs or 62.66 percent of the country’s total employment. Micro enterprises had the biggest share (29.38 percent) closely followed by small enterprises (25.78 percent). Large enterprises accounted for 37.34 percent of the country’s overall employment. The MSME sector, in terms of value added, contributed 35.7 percent of the total, with manufacturing having the largest share of 6.87 percent. Wholesale and retail trade and repair contributed 6.58 percent followed by financial intermediation with a share of 6 percent.
In the years before the pandemic, MSMEs accounted for 40 percent of the country’s Gross Domestic Product (GDP). MSMEs, many of them subcontractors of large firms or suppliers of exporting companies, contributed 25 percent of the country’s total exports revenue.
As the Philippines tries to return to life before COVID-19, financial inclusion, including the revival of the MSME sector, will be crucial.
Enrico Gaveglia, UNDP Philippines officer-in-charge, said at a forum organized by the international organization towards the end of 2020, “MSMEs play a crucial role in the Philippines’ efforts to recover from the crisis brought about by this (COVID-19) pandemic.”
The forum identified among the most pressing needs of MSMEs access to credit facilities, tax breaks, and deferred loan payments.
Sustainable financing services
SB Finance’s goal is to provide various opportunities in local business-building by providing access to sustainable financing services that promote financial inclusion and business growth. It has developed diversified and versatile products and services to respond to various client needs.
Digitization is also an integral part of SB Finance’s financial inclusion drive. The ease of doing business through mobile phones and other gadgets is encouraging people of all ages and from all sectors to explore financial services and products.
As such, SB Finance has developed its own mobile application, zukì. Through the app, entrepreneurs, investors and consumers can apply for four different types of funding options:
- Hooloogan cash loan, which offers loans of up to PHP200,000 for cash line needs;
- Personal Loan of up to PHP2 million that can be used to cover expenses related to education, business travel, or debt consolidation;
- Car4Cash, which gives vehicle owners access to cash in exchange for their car’s Official Receipt and Certificate of Registration (OR/CR); and
- MotorsikLOAN, which allows borrowers to purchase a motorcycle for a monthly interest rate of as low as 1.2 percent for medium/high-end bikes and 2.47 percent for regular bikes.
“Our vision is to be the trusted and preferred financial service provider of Filipinos—empowering them to make educated financial decisions according to their needs. Through this partnership with CCCI, we’re able to expand markets and offer Filipinos new (credit options) that are built on an easy-to-understand, needs-based, digital consumer experience roadmap.”
—Abbie Casanova, President and Chief Executive Officer of SB Finance
“CBM is very proud to be working with SB Finance. Our objectives are aligned in empowering our community in terms of financial literacy, supporting individuals and small business owners through access to business loans and financial support,” said Brigette Carmel Lim, CBM (Cebu Business Month) 2022 overall chair.