Tuesday, March 19, 2024

With shift to digital payments, BSP wary of ‘financial exclusion’ of some sectors

Although Covid-19 has fast-tracked the shift to digital payments with cash withdrawals and check transactions significantly going down since the quarantine period, an official of the Bangko Sentral ng Pilipinas (BSP) warned of the risk of financial exclusion of some sectors even as the “new normal” makes going digital imperative.

“The pandemic has thrust upon us this opportunity to shape a new economy powered by digital, but if we’re not careful and deliberate the benefits of this transition to digital could be uneven. Certain segments of the population may be further excluded such as small and medium enterprises and agri-businesses,” said Ellen Joyce Suficiencia, director of the financial inclusion group of BSP Center for Learning and Inclusion Advocacy.

Suficiencia said the BSP’s thrust is to promote bank lending to MSMEs and agri-businesses by making sure lending risks become more manageable.

She said the BSP’s initiatives to ensure financial inclusion of MSMEs and agricultural workers include supporting the credit surety fund program and establishing a credit risk database to wean banks from depending on the use of collateral in credit evaluation.

Digital payments for merchants is also being promoted to help them transition to the new economy and to support e-commerce according to the BSP executive.

The BSP, she said, is firming up a roadmap on supply chain finance (SCF) market development and planning to promote agri-value chain financing that can help smaller enterprises access better financing.

“It just shows that digital payment is no longer becoming just an option but a necessity driven by movement restrictions and health risk considerations,” said Suficiencia, noting that the shift to electronic payment was rapid and would continue into the future.

She urged employers to provide their workers the necessary tools to access digital payments to enable them to thrive in the digital economy.

Suficiencia said that even microfinance institutions (MFIs) are recognizing the urgency of adopting digital payments, which is a notable development since MFIs have an outsized reach in the low-income sector and the rural-based clients.

Subscribe

- Advertisement -spot_img

RELEVANT STORIES

LATEST

- Advertisement -spot_img