Filipino microentrepreneurs use digital solutions to make their businesses future-ready
Microentrepreneurs who were at risk of losing their businesses upgrade to digital platforms to keep their businesses going
MANILA, Philippines — The last thing Angelita Dagoc wanted to do during the pandemic was lay off her employees. Her business, Ferangeli Guitar and Souvenirs in Lapu-Lapu City, Cebu, was already catering to international customers via the company website.
But given the challenges with international shipping during the pandemic, Angelita wanted to expand locally. She started using a machining tool which was able to produce more guitars within a shorter production period, and also make it more affordable.
As a member of Taytay sa Kauswagan, Inc. (TSKI), a microfinance institution, she was able to avail of a loan and continue business operations.
“Dahil sa Shopee at Lazada, umabot ang product namin sa buong Pilipinas (Because of Shopee and Lazada, our product reach extended to the entire Philippines),” Angelita says.
Her story of success amid one of the most trying times in this century is just one of many, demonstrating the resiliency of Filipino microentrepreneurs.
The willingness to embrace change, no matter how difficult or challenging, is what enabled these microentrepreneurs to succeed in a challenging period.
Strengthening financial inclusion
Angelita belongs to a roster of top microentrepreneurs who were recognized at the Digital Financial Inclusion Awards (DFIA).
The event was established to recognize efforts in promoting financial inclusion through the digitalization of microfinance.
DFIA leverages the success of the Citi Microentrepreneurship Awards program, which has recognized over 150 microentrepreneurs and microfinance institutions across the country since 2002.
Funded by Citi Foundation, in partnership with the Microfinance Council of the Philippines Inc. and supported by the Bangko Sentral ng Pilipinas, the DFIA recognizes outstanding microentrepreneurs and microfinance institutions.
They should have successfully used digital solutions to perform a wide variety of financial transactions, from payments to savings to disbursements and investments.
Riding the digital wave
The digital journey for each of these microentrepreneurs may have been unique, but they all reaped the rewards of business growth and increased livelihood opportunities.
Take the case of Maxima Forbes of Tayabas, Quezon. She brought her brand, EM-AR Handicrafts, to Facebook and saw her orders increase.
“Malaking tulong yung nasa online na ang mga produkto ko (Sharing my products online made a big difference),” shares Maxima, who is a member of CARD Inc.
Payments for goods were made more convenient through GCash and online bank transfer, helping her retain customers and enjoy repeat business.
The same relentless spirit is what kept the business going for Rosalinda Espana of Baler, Aurora, whose handicraft business called Mene Crafts and Things was greatly affected by the shutdown of tourism during the pandemic.
“Naisip kong magtahi ng face masks na gawa sa sabutan leaves (I came up with the idea of sewing face masks using native leaves),” recalls Rosalinda.
With the help of a loan from Alalay sa Kaunlaran Microfinance Social Development, Inc. (ASKI Microfinance), she was able to continue production and cater to more clients, including foreigners. Rosalinda also started offering GCash as a payment method.
Taking it one step further, some microentrepreneurs even made sure to support others in the community.
Merlyn Jolo of Miramonte Heights, Caloocan City hired her neighbors to work as seamstresses and dealers for Jhewelle’s and Jhairus Bedsheets/Punda shop. She sells on Lazada, Shopee and Facebook, and now supplies to various parts of the Philippines.
“Lumiit ang puhunan noong lockdown. Kabuhayan sa Ganap na Kasarinlan Credit and Savings Cooperative (K-Coop) gave me a loan para mai-online ang business (Business decreased during lockdown. K-Coop gave me a loan so I could put my business online),” says Merlyn.
Lalyn Reporas of Valladolid, Negros Occidental bought fresh seafood from nearby seaside communities, providing them with livelihood and income.
For this member of Negros Women for Tomorrow Foundation Inc. (NWTF), it became easy to sell her products once she set up a Facebook page for MabKai Seafood Boil.
“Meron na rin kaming resellers sa Kabankalan, Cadiz at dito sa Bacolod City (We now have resellers in Kabankalan, Cadiz and Bacolod City),” she adds.
Nida Lyn Paculba, who hails from Villa Verde, Iligan City, also experienced a surge in customers and income when she went beyond social media and established her own website and a Google Play Store and Apple Store app for Paculba Flowershop and Belle’s Bridal Shop.
“Dumami ang followers at customers. Dumoble ang income (My followers and customers doubled. My income also doubled),” Nida, a member of Serviamus Foundation Inc., says.
Lowering operational costs
Aside from creating awareness and attracting more customers, microentrepreneurs found that digital solutions also lowered their operational costs. They no longer had to offer their products in person or spend on commute to collect payments.
In the past, Ma. Sol Manlabe of Bago City, Negros Occidental used to send her husband to deliver her product, Lola Nim’s Pure Homemade Organic Ginger Powder.
Now they can use affordable delivery services instead. “Bumaba ang expenses. Noon, kapitbahay lang ang bumibili. Ngayon, marami na. (Our operational expenses decreased. I also have more customers now from different areas),” Sol says.
Buyers also found it more convenient to pay via GCash. With the help of NWTF, Sol was also able to fund her own turmeric production to avoid supply problems.
Similarly, Melanie Valenzuela of San Jose, Batangas saw a 75% reduction on her daily operating expenses.
“Nakitaan namin ng potensyal yung online banking, GCash at Facebook Messenger para magbenta (We saw the potential of online banking, GCash and Facebook Messenger to sell our products to a wider market),” Melanie explains.
NWTF provides Melanie with loans to support her business growth, which now caters to most areas in Luzon.
Going cashless
The security of cashless transactions is another benefit that these microentrepreneurs enjoyed.
Alfredo Villocino, Jr. of Gen. Mariano Alvarez, Cavite made sure that orders for Winter Quarters Food Products were paid for, ahead of shipping. Being on platforms like Facebook and Shopee allowed him to serve customers wherever they are.
“Dumami ang buyers at ang income ko, at mas madali na yung payment system (I gained more buyers, and eventually, more income. The payment system is also convenient),” Alfredo, who is a client of CARD SME Bank Inc., says.
According to CARD Bank Inc. client Adela Rivadeneira of Sta. Cruz, Marinduque, “Di na kami natatakot na baka ma-hold up kami kapag nangongolekta kami (We are no longer afraid of losing the cash we collect).”
Her business, 3 Sisters Homemade Banana Chips, accepts GCash, Maya, online bank transfer and konek2CARD payments for orders placed on Facebook, Shopee and Google My Business.
Rewarding microentrepreneurs
For Citi Foundation, BSP and MCPI, the DFIA program is a way of supporting financial inclusion initiatives in the country, as well as the government’s efforts toward digitalization.
It also emphasizes the role of microfinance institutions in expanding digital financial services to disadvantaged and underserved households.
The microentrepreneurs mentioned above were given a cash incentive of P110,000 each, as additional capital for the continued digitalization of their respective businesses.
Other microentrepreneurs who were recognized by the program include Norma Alcrates, Lorie Jane Almazora, Phoebe Borce, Margie Bunzol, Ofelia Cabral, Marilyn Centeno, Vicente Cristobal, Rosalyn Espenorio, Jeriel Gelito, Josie Mae Iroy, Susana Malabanan, Sarah Jane Pascual, Lalyn Reporas, Leonie Reyes and Ma. Hazel Vitamog.
DFIA is an important acknowledgement for microfinance institutions as it creates awareness and provides technical training in digitalization, so they can support microentrepreneurs’ business needs.
Ultimately, this influences microentrepreneurs to innovate their products and services.
As part of the DFIA program, four microfinance institutions received technical assistance in addition to their recognition. These are Cantilan Bank, CARD MRI, Kabalikat para sa Maunlad na Buhay Inc., and Taytay sa Kauswagan Inc.
A training workshop on developing a digital transformation roadmap was also provided to at least 30 microfinance institutions, wherein five were selected for additional technical training to implement their pilot digitalization initiative.
The microentrepreneurs and microfinance institutions were chosen by the National Selection Committee co-chaired by Bangko Sentral ng Pilipinas Gov. Felipe Medalla and former Citi Philippines CEO (currently CEO of Citi Taiwan) Aftab Ahmed.
Members include Trade and Industry Secretary Alfredo Pascual; RFM Corporation President and CEO Jose Ma. Concepcion III, SM Investments Corporation Independent Director Ramon Lopez, Inquirer Group of Companies CEO Sandy Prieto Romualdez, Salve Duplito, Asian Development Bank Financial Sector Specialist Kelly Hattel and International Finance Corporation Global Digital Finance Specialist Lowell Campbell.
Any brand or product mentioned in this article is purely for educational or informational purposes only and should not be considered as a recommendation or endorsement by any of the institutions behind the Digital Financial Inclusion Awards.
