BOI: Inclusive business models gaining ground

CEBU, Philippines — Inclusive business models such as cashless payment systems are showing potential in the Philippines' push for financial inclusion, according to the Board of Investments.

“Creating a financially inclusive ecosystem in the Philippines is essential in boosting equitable growth and development, which creates more economic opportunities for low-income communities,” said BOI managing head Ceferino Rodolfo, in reaction to Bangko Sentral ng Pilipinas' findings that 86 percent of Filipino households remain unbanked.

The members of these households do not avail of financial services because they have little access to financial institutions, lack skills in managing bank accounts, have little trust in banks and financial institutions, and find service charges and maintaining balances too costly for their needs.

The BSP added that the finance sector should take advantage of increased digitization and the existence of enabling policies, including the National Strategy for Financial Inclusion (NSFI), to target unbanked and underserved markets.

The BSP has said it has laid the groundwork for an enabling policy and regulatory environment so financial institutions can reach more unbanked and underserved Filipinos.

There’s a big market whose needs mean different business opportunities for financial institutions.

Given the Philippines’ rising number of smartphone users, the increased adoption of digital financial services is key to reaching more unbanked and underserved Filipinos, according to the central bank.

One of the inclusive business models in the finance sector that successfully utilized digital technology is Globe Fintech Innovations Inc. or Mynt, which operates microservice payment service GCash and mobile loan provider Fuse Lending.

Aside from the finance sector, inclusive business models are being implemented and making an impact in other Philippine industries.

The Philippine government is advocating the development of more inclusive business models nationwide. Under the 2017-2019 Investment Priorities Plan, the BOI may grant fiscal incentives to tourism and agribusiness firms with inclusive business models.

“Collaboration between the private sector and government is essential in creating a more financially inclusive ecosystem. As companies try to create their inclusive business models, the Board of Investments will keep on working with other government institutions to create an environment where these innovative and sustainable models can thrive,” Rodolfo said. (FREEMAN)