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Keys to better financial inclusion

Building an inclusive financial system has become an important policy objective in the country. Latest figures from the Bangko Sentral Pilipinas for 2017 stated that 77 percent of adult Filipinos remain unbanked, with 52 percent unable to allocate money for savings.

In line with the aim to improve the state of financial inclusion in the Philippines, a National Strategy for Financial Inclusion was optimized to help raise awareness, understanding, and coordination among stakeholders about the subject. The national strategy, which is aligned with the Philippine Development Plan, is divided into four areas namely policy and regulation, financial education and consumer protection, advocacy programs, and data and measurement.

One of the companies with a flagship campaign focused on promoting financial literacy is Home Credit Philippines, a Prague-based consumer finance business which has been in operation in the country for five years. In 2016, it launched its flagship campaign Juan, Two, Three which focuses on teaching the basics of budgeting and saving to different communities all over the country. 

Chief Executive Officer of HCPH Annica Witschard says that a multi-dimensional approach is necessary for the progress of financial inclusion in the country. “The challenge is that a huge chunk of the public is not equipped with the basics of handling their finances. We need to start educating people to help them become financially literate.” 

This rings true for the 21 percent of the 52.8 million adults in the country who do not have formal bank accounts because of their perceived lack of need for them. Moreover, the 2017 BSP Report for financial inclusion states that 10 percent do not have proper knowledge of how to open an account, while 8 percent have a lack of awareness about it. 

Annica continues, “The problem is that we don’t really talk about the basics of financing as much as we should. It isn’t formally included in the curriculum of our primary schools, for example. This gap is something that advocacy programs focused on teaching financial literacy can address.”

The results of financially-focused advocacy campaigns like the Juan, Two, Three Campaign are proof to this. Annica shares, “We have gotten a lot of uplifting feedback from those we visited. People have been saying that they didn’t understand the importance of keeping their money on formal bank accounts before. Others simply shared that they didn’t know they can still save regardless of how much their salaries are. Directly reaching out to these people, which traditional financial institutions do not always cater to, is very eye-opening,” says Annica. 

The Juan, Two, Three program combines two important pillars of the national strategy for financial inclusion—financial education and advocacy programs. To make financial learning more interesting, the campaign utilizes games and creative materials like comic books to educate people about financial basics. It now has a long-term partnership with the DSWD’s Pantawid Pamilyang Pilipino Program and has so far reached more than 9,700 people and 105 communities. 

As part of its efforts in expanding its reach, the campaign is now focusing on creating more partnerships with non-civic organizations and in tapping other stakeholders. Most recently, it visited senior citizens and wives of fisher folks from San Fernando, La Union with help from the Rotary Club of San Fernando North. The program also held its first financial literacy event for the elementary and Junior High School students of Colegio de Los Banos in Laguna.

“We want to explore and fill in other areas where financial education is needed. But our main focus is to really educate people first. These are the basic steps to better financial inclusion. If they are well-informed, then it is easier for them to be included,” closes Annica. 

Topics: Bangko Sentral Pilipinas , Philippine Development Plan , Annica Witschard
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