Achieving financial inclusion

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Inclusion programs include providing appropriate and affordable financial products and services even for the essentially unbanked and the so-called underbanked, the World Bank says. CONTRIBUTED PHOTO

Financial inclusion is a goal that both the national government and financial institutions continually strive to achieve.

According to the World Bank, financial inclusion is the key enabler towards reducing extreme poverty and boosting shared prosperity. It is also an enabler for seven of the so-called 17 Sustainable Development Goals (SDGs) of the United Nations (UN), which is “a global call to action to end poverty, protect the planet and ensure that people enjoy peace and prosperity.”

For the World Bank, financial inclusion means “individuals and businesses have access to useful and affordable financial products and services that meet their needs.” Additionally, these financial products and services — such as transactions, payments, savings, credit, and insurance — are “delivered in a responsible and sustainable way.”

In developing nations such as India and the Philippines, financial inclusion lends a particular focus on providing appropriate and affordable financial products and services to vulnerable groups, such as low-income families and micro-entrepreneurs that have no access to formal banking.

This distinction explains the sustained popularity of microfinance institutions in developing countries. In the Philippines alone, there are more than 170 microfinance institutions that cater to more than 1.47 million borrowers, according to 2015 data from the Bangko Sentral ng Pilipinas (BSP).

“In the Philippines, there is still a huge gap in terms of access to financing. Unless this gap gets addressed by banks and other financial institutions, it remains to be the greatest barrier to achieving financial inclusion in the country,” said Jerome Minglana, BPI Direct BanKo, Inc. president.

In a bid to provide a more formal lending platform to self-employed micro-entrepreneurs (SEMEs), a sector that rarely has access to formal banking, the Bank of the Philippine Islands (BPI) merged two (2) of its subsidiaries to form BPI Direct BanKo.

“In its 167 years, BPI has provided well-developed and relevant financial products and services to Filipinos. BPI Direct BanKo is BPI’s vehicle to address financial inclusion by providing micro-entrepreneurs access to appropriate and affordable loan products to grow their businesses, and extending expert advice to enhance their financial knowledge,” said Minglana.

Through its 200 branches nationwide, BPI Direct BanKo aims to elevate the lives of everyday micro-entrepreneurs, such as market vendors and the proprietors of neighborhood bakeries, mini-grocery stores, and eateries, among others.

“By providing a more formal lending platform, we not only elevate the lives of small business owners, but also create an enabling business environment that benefits the country’s economic development in the long run. They are the backbone of the country,” said Minglana.

To get past the usual hurdles of borrowing from banks, BPI Direct BanKo has simplified its documentary requirements and streamlined its procedures to speed up the loan application process.

“Loan applicants tend to get intimidated by a long list of documentary requirements, which are often hard to acquire or secure. At BPI Direct BanKo, we only require simple documents that most micro-entrepreneurs can easily provide, such as a barangay permit, to get over this barrier,” said Minglana.

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