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Digital platforms leading Philippines to greater financial inclusion
MANILA, Philippines — The rise of various digital platforms is preparing the country for a financial services revolution leading to inclusion, G-Exchange Inc. president Albert Tinio said.
“Filipinos have come of age and are ready to take the next step forward. We are world leaders when it comes to social media and we are very comfortable with the internet. We have gone beyond calls and text and we seek to do more with our mobile phones,” said Tinio, who heads G-Exchange, operator of mobile money payment service GCash
“Thus, mobile financial services present an opportunity to complement mainstream financial services to serve millions of financially underserved Filipinos,” he added.
Tinio said the growing number of people embracing digital platforms could help address the country’s constant dilemma on financial inclusion.
At present, there are about 106 million Filipinos with active SIM cards reaching 120 million. In addition, there are 73 million mobile phone users in the country, 34 million of which are unique smartphone users. At any given time, there are 67 million Filipino users online.
Leading this group of active mobile and internet users who can easily benefit from mobile financial services are the youth – young professionals, freelancers and students—who are adaptive to modernization and are at ease with technology. This is followed by households in the cities where technology is prevalent and, eventually, those in provincial areas.
“We see that path, we see that migration: The youth, the urban centers and, then, to the rural centers. Is it limited to pure consumers? No. Included in that journey are the enterprises. The needs of those in rural and urban areas are the same. We’re all entitled to that financial service,” Tinio stressed.
While traditional institutions will remain to cater to the fiscal needs of the people, Tinio claims that GCash poised to lead in the mobile financial services segment with its mobile wallet where those unbanked can place their money and use it to send money, buy telco loads, pay bills, or buy things offline or online.
Sister companies GCredit and Fuse also allow those unbanked and underserved to avail of loans, insurance, and investment
“Our vision is to bring down that financial wall for every Filipino,” Tinio stressed. “Through the services that we offer, financial access for our unbanked and underserved Filipino brethren is easily unlocked.”
At present, 66 percent of the country’s population, or almost seven out of 10, have no bank accounts due to various reasons such as absence of physical banks especially in remote areas and lack of identification documents that banks typically need to open accounts.
Moreover, 90 percent, or nine out of 10 Filipinos, have neither access to credit cards nor credit scores. The latter is a numerical equivalent of trustworthiness to avail of and pay for a loan. As a result, many turns to the informal money-lending system where interest rate could go as high as 20 percent.
Tinio, however, said these problems may open an opportunity for GCash, GCredit and Fuse to bridge the gap between the banked and the unbanked sectors.The three companies are under Mynt, a fintech firm owned by Globe Telecom, Ant Financial and Ayala Corp.
Source: https://www.philstar.com/business/2018/07/10/1832041/digital-platforms-leading-philippines-greater-financial-inclusion#75p1HHbCiUQypdCx.99