Better use for phones
The same cellphones people use to mingle on social media or gawk at celebrities online can be used to give them greater financial security. And no, this doesn’t involve a text scam.
Giving more people access to financial products and services—which is what that buzzword “financial inclusion” means—would boost gross domestic product (GDP) by as much as nine to 14 percent in four Southeast Asian countries, including the Philippines. One way to do so would be to enable them to use their phones to access these services.
Both the opportunities and challenges are spelled out in a report released this week by the Asian Development Bank (ADB). The report, titled “Accelerating Financial Inclusion in Southeast Asia with Digital Finance,” points out that in Tanzania, the use of mobile phones to provide financial services has helped grow the percentage of adults with bank accounts from 17.3 percent in 2011 to 39.8 percent in 2014.
As much as US$800 billion in additional savings could be generated in four countries (Cambodia, Indonesia, Myanmar, and the Philippines) if more people received access to banking services through phones, the same report said.
The lack of awareness that these arrange- ments are possible is one of several challenges. The lack of interoperability is another. In India, customers of one phone network’s mobile money service can transact seamlessly with other networks’ customers, the same report said. But in the Philippines, it added, “the lack of interoperability between mobile network operators has been a major impediment to the adoption of e-payments.”
Yet another challenge is the lack of a real-time public records database that could help ease transactions, like the KYC (know-your-customer) verification process needed in granting loans or moving payments.
About 54 million Filipinos or roughly 52 percent of the population use their mobile phones for social media activities, according to another report, “Digital in 2017: Global Overview,” by the agency We Are Social. Each day, Filipinos spend an average of 3:36 hours on the internet, using their phones.
Imagine the possibilities if more of us were taught and empowered to use these phones not just for social media rubbernecking, but also for financial services: to gain access to credit for productive microenterprises, make micropayments for insurance to protect our loved ones, or push savings with ease from our mobile wallets.