The Bangko Sentral ng Pilipinas (BSP) is committed to helping the country’s microfinance institutions (MFIs) move forward in their digitalization journey.
“We continue to engage the donor and development communities to encourage the provision of technical and financial assistance for the digitalization initiatives of MFIs,” BSP Governor Benjamin E. Diokno said during a conference of the Alliance of Philippine Partners for Enterprise Development (APPEND), a network of microfinance entities.
As last-mile financial service providers, microfinance institutions play an important role in promoting financial inclusion in the countryside. As of Q1 2021, there are 149 microfinance banks servicing 2.05 million borrowers.
Governor Diokno urged MFIs to explore digital innovations under the BSP’s Digital Payments Transformation Roadmap (DPTR). The roadmap envisions 70 percent of Filipino adults owning a transaction account and at least 50 percent of transactions done digitally by 2023.
A key DPTR initiative is the rollout of the PhilSys ID, which MFIs can use to conduct Know-Your-Customer activities online and in real time to reduce onboarding costs.
Another DPTR initiative is the BSP’s issuance of a policy on digital banks, which can act as service partners for MFIs. A digital bank offers financial products and services that are processed end-to-end through a digital platform or electronic channel.
The BSP also endorsed Executive Order No. 127, which promotes satellite broadband technologies to advance rural connectivity. This reform initiative can help MFIs deliver financial services more efficiently to rural communities.
“We are thus working to further ensure MFIs are equally placed alongside big industry players and well-positioned to advance financial inclusion beyond the pandemic,” the Governor concluded.
