UNO Digital Bank, Proxtera target SMEs in financial literacy pact

UNO Digital Bank and Singapore-based Proxtera will train 10,000 Filipino MSMEs on financial literacy as part of the SME Financial Empowerment Program (SFE), integrating them into the banking system and empowering them to scale and grow.

Photo shows Manish Bhai, founder and CEO of UNO Digital Bank (left) and Saurav Bhattacharyya, CEO of Proxtera

This is a step toward educating millions of unbanked Filipinos that traditional financial institutions find hard to reach. According to the 2021 Bangko Sentral ng Pilipinas Financial Inclusion Survey, 45% do not have the minimum financial requirement to open an account, 40% lack the right documents, and 22% lack knowledge about the process.

“When you piece all this together, the financial literacy penetration is very low because people haven’t really understood what it means to integrate into organized banking or have a relationship with financial institutions,” Manish Bhai, CEO of UNO Digital Bank, said. “We want to promote financial literacy as an entry point to the formal financial sector.”

“SFE provides financial literacy credentials which is the first step in providing an important indicator of intent to pay,” Saurav Bhattacharyya, Proxtera CEO, said. “We are very excited to have this partnership with UNO Digital Bank in the Philippines which supports the core purpose of Proxtera: to serve MSMEs through financial inclusion.”

Amor Maclang, convenor of Digital Pilipinas, said “We need to prove that unbanked MSMEs without a digital identity can be given a digital identity and also a financial footprint through education.”

The SFE Program courses are heavily subsidized to ensure they are accessible to MSMEs. Users who complete the course will receive a digitally verifiable certificate. Furthermore, users will also gain access to a resource hub with financial services tools and knowledge services.

Bhai said, “What Proxtera has done is developed these modules which are effective, fun, and engaging. With this partnership, we want to make sure that these modules reach the critical mass.”

After the MSME owners complete their training, UNO Digital Bank will further support their financial journeys by giving them access to a digital bank account and loan facilities.

In 2022, the UNO Digital Bank team held a brainstorming session to plan how to use education in promoting financial literacy.  They were thinking of producing their own training modules and doing the actual mentorship to the MSMEs themselves.

However, seeing Proxtera’s SFE courses during the program’s launch in Africa and Asia made UNO decide to establish a partnership with them instead, cementing it during the recent Philippine FinTech Festival (PFF). 

The PFF highlighted ASEAN as a global powerhouse for innovators with the participation of 200 international government and industry leaders. It was convened by Digital Pilipinas, the largest private sector-led movement championing technological adoption in the country, in partnership with Elevandi, which was founded by the Monetary Authority of Singapore (MAS) to foster public-private-sector dialogue for FinTech advancement.  

Bhai said the Proxtera partnership “will definitely help the business owners out there to make use of multiple financial products which will enable them to grow their business, and be profitable and self-sustaining.”

Bhattacharyya agreed, saying, “Our whole purpose as a company is to help MSMEs in financial inclusion—which is where UNO Digital Bank is starting and targeting their customer base as well,” 

He further explained the importance of supporting MSMEs, especially when it comes to banking services and financial literacy: “MSMEs contribute to a large percentage of the employment of many countries. The moment they grow, their ability to pay their own employees grows. Everybody benefits because the fabric of society, which is a large percentage of the population employed by MSMEs, also does better economically. And that brings better overall economic stability to the country.”

“MSMEs are the lifeline of the economy, and funding and proper money management are the lifeline of the business. The MSMEs have a need for credit rating, financial investment, and other financial services. And we, as a digital bank, feel like providing that is our moral responsibility to them,” Amit Malhotra, chief business officer of UNO Digital Bank, said.

UNO Digital Bank and Proxtera are preparing for the SFE’s next phase as the MSMEs graduate.

Guia Donido, chief of the PTTC Training Division, says they will continue to enroll MSMEs whose main problems are access to finance.

“What’s the usual concern of MSMEs?,” she elaborated. “Additional capital and learning how to manage and grow capital. These were addressed by the learning modules provided through the website. This is a good program that addresses the concerns of MSMEs from training and financial education to access to finance services.”

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