According to the survey of 2017 "Global Findex Survey", the Philippines ranks among the lowest in Southeast Asia for most of the financial inclusion indicators. As per the survey, only 34 percent of Filipino adults have an account in a bank or financial institutions as compared to Indonesia it is 49 percentage, in Malaysia, it is 85 percent.
The Philippine government is trying to boost inclusive growth of the financial services access to the unbanked population of the country by implementing reforms to expand Filipino's access to financial services. To support the government's efforts on 21st August 2020, the Asian Development Bank (ADB) has approved a $300 million policy-based loans.
The aim of ADB's Inclusive Finance Development Program- Subprogram 2 is to help the government reach targets to strengthen the institutional and policy environment for the financial inclusion, to provide financial services to rural banks and non-banking financial institutions.
Mr Ahmed M. Saeed, Vice-President of ADB said "The Philippine government's anti-poverty strategy aims to equip Filipinos in the bottom 40 percent of the income strata with education, skills, & livelihood assistance so they can break away from a vicious cycle of intergenerational poverty. Ensuring all Filipinos are part of the financial system is important to this approach."
By approving this loan ADB is partnering with the Philippines for implementing innovative digital solutions in the finance sector, this will significantly help to provide access to financial services and products to the large unbanked population.
These reforms will expand the coverage of the credit reporting system, will promote the use of cloud-based core banking technology among rural banks and will also support the development of Islamic finance in the country.
Some of the ADB' other programs are $400 million Competitive and Inclusive Agriculture Development Program launched to help the government increase agricultural productivity, and the $500-million Expanded Social Assistance Project launched to support education and health conditional cash transfers to poor households.
The rural banks and non-banking financial institutions should leverage smart digital solutions like digital onboarding, internet banking, digital lending, mobile banking solutions.
Nelito's FincraftTM Digital Banking Solutions provides a seamless digital banking journey to the customers of banks and financial institutions by providing faster, easier access to banking services.
By adopting these solutions will help financial institutions to increase customer reach, faster loan processing, reduce the turnaround time, compete with new digital entrants, reduce overheads and improve operational efficiencies and lower NPAs.