BSP Governor Benjamin Diokno (File photo)
MANILA – The Bangko Sentral ng Pilipinas (BSP) has highlighted the contribution of microfinance institutions (MFIs) in making financial products and services more accessible to micro and small enterprises, especially in rural areas.
In a briefing Thursday, BSP Governor Benjamin Diokno said MFIs can further expand their reach through digital transformation.
Diokno said MFIs are strategic partners of the government to achieve financial inclusion as 84 percent of local government units (LGUs) have access to MFIs.
More than half or 57 percent of unbanked LGUs also have MFI presence.
“Today, 144 banks are engaged in microfinance. They provide safe and affordable financial services to around 2 million borrowers with (a) total microfinance loan portfolio of PHP26 billion,” he said.
The BSP chief added that non-bank MFIs, such as cooperatives, have assisted 8.8 million members providing PHP288 billion worth of outstanding loans.
On the other hand, microfinance non-governmental organizations served 6.2 million clients with a total loan of PHP50 billion.
“With that, the BSP recognizes the potential of technology as a game changer for microfinance,” he said.
Diokno cited there is a growing traction on the use of digital loan disbursement and collection as well as online payment gateways.
He added mobile applications provide seamless experience for self-service options to access account information, and availing of online financial services.
Innovation has also been pursued in back-end operations of MFIs, such as automated financial management systems, as well as credit scoring and decisioning models, Diokno said.
He said embracing digitalization will facilitate in transitioning microfinance clients from cash to digital transactions that will support the BSP goals on digital payments.
“Collaboration is instrumental in the establishment of shared digital platforms or facilities among MFIs to create a multiplier effect on the microfinance sector,” he added. (PNA)
