Policymakers globally are increasingly recognizing the importance of financial inclusion. According to World Bank data, small and medium enterprises represent nearly 90 percent of businesses and more than 50 percent of global employment. In emerging economies, SMEs contribute up to 40 percent of national income, with the numbers expected to rise significantly when informal small, and medium enterprises are included.
Rommel Santos, chief executive officer and founder of SAM Digital Technologies, a Filipino-owned FinTech firm based in Australia, believes that improving SME financial inclusion is critical in increasing economic growth and job creation. In addition, Santos said the effectiveness of fiscal and monetary policy could contribute to financial stability.
"Financial inclusion is vital to the growth of the Filipinos," Rommel said during the Daily Tribune's digital show, Usapang Business. "But providing financial access to the underserved and the most vulnerable are quite challenging, particularly those living in remote communities because of accessibility. This is why technology and digital solutions are critical to provide these unserved sectors with financial access and allow them to join the formal financial system."
The biggest challenge, according to him, is the Internet connection.
Enter the SAM Bida Protection Program, a financial literacy and access project that aims to educate Filipinos in far-flung communities on how to create a digital footprint "without going" to brick-and-mortar bank branches that will allow them access to lenders and financial windows.
"We have SAM Bida leaders who are visiting remote communities to educate the people about the advantages of digital transactions and how this program will open opportunities to scale up their business operations through access to lenders or enjoy other benefits, like group insurance," he added.
He explained that since SAM Technologies is based in Australia, it has developed a wealth of knowledge in digital technologies. The company also has a presence in Singapore, United Arab Emirates, and the United States.
With SAM Technologies, members of SAM Bida will receive a community building program where they will learn about the opportunities in the many conventional business development technologies within the program.
In addition, the SAM Bida members will receive benefits and privileges, including protection programs such as cheaper food profit, job opportunities, and education scholarships for their children.
"We are trying to get the attention of the Filipinos by introducing them to the advantages digital technologies could offer them," Santos said. "Nobody now has an excuse that they do not have sufficient resources to improve their lives because there are many technological tools that will help them upscale."
He added that SAM Bida's program would improve SMEs' access to finance and find innovative solutions to unlock sources of capital.
He said that SMEs' contribution to the national economy would exponentially expand with a holistic approach, combined with lending services and advisory to clients.
However, Santos added that a range of policies and reforms must be introduced to support SME financial inclusion, including direct intervention to enhance bank credit and joining the SAM Bida program.
"A key conclusion is that partial approaches, such as policies focusing solely on direct public financing or guarantees, are unlikely to yield large benefits. Rather, meaningful, safe, and sustainable SME access to financing requires a holistic approach covering the key building blocks listed above, from macroeconomic to legal and regulatory aspects," Santos said.
