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Female shop owners catalyzing financial inclusion in the Philippines

Grameen Foundation’s digitally powered Community Agent Network (CAN) has equipped and empowered a largely female field force to break through barriers to financial services for the country’s low-income communities

MANILA, April 12, 2018 – In a breakthrough for financial inclusion in the Philippines, Grameen Foundation and its implementing partners Action.able, Inc and FSG Technologies, Inc. has proven that a female led agency force can work to bring financial services to low-income communities, many from from a bank branch.

In less than two years, the CAN program has enabled up to one million previously underserved people to benefit from formal financial services, acquired a footprint of nearly 1,900 agents, 75 percent of whom are women who operate small local shops (sari-sari stores). As of January 2018, the CAN agents have facilitated more than 4.3 million transactions valued at 1.3 billion Philippine Pesos (USD 24.9 million).

When CAN was initiated in 2015, 36 percent of Filipino municipalities did not have a local banking office, and in 2014, less than 12 percent of adults had obtained a loan from a formal financial institution. But the benefits of having access to financial services are well documented: from helping people start businesses to making the difference between destitution and stability when a crisis strikes.

“Financial services are especially crucial to women. They can change a woman’s control of access to food, health, housing and education,” said Gigi Gatti, Grameen Foundation’s Regional Director, Asia. “The CAN program has proven that women make very good agents. They have patience and encourage other women to try other services such as paying into their social security contributions or buying insurance. The CAN platforms are ready and open to expand to use cases beyond payments and to support small businesses.”

To foster financial inclusion, the Banko Sentral ng Pilipinas (Central Bank of the Philippines) launched the National Strategy for Financial Inclusion (NSFI) in 2015. To foster an environment where there is effective physical access to a wide range of financial products and services, it focuses on four components: Access, Usage, Quality and Welfare.

The CAN program addressed these four components by experimenting on various ways to acquire agents and equip them with platforms that that are affordable, learning what financial products and services are locally relevant, and understanding gaps in agent services and end-client adoption.

“The best way to empower the Filipina is to provide her with better options for economic growth and participation. Economic empowerment leads to freedom and equality. When women who are financially literate have the means to start a business and do well in it, they are stronger and more capable of avoiding a future of physical and emotional abuse.” says Undersecretary Philip Francisco Dy. “The way we value the role of women in society determines the way we move forward as a nation.”

Through CAN, Grameen Foundation partnered with financial technology providers Action.Able, Inc., and FSG Technology Ventures, Inc. to bring portable, easy and affordable payment platforms to communities. Ninety-one percent of the agents that were surveyed by Grameen Foundation were within residential areas and operated small convenience (sari-sari) stores, beauty salons, laundromats, repair shops and other businesses that are entrenched in villages. There are even agents in islands, such as Talim island, where there are no banks and one can only get there by boat.

While operating their own businesses, these agents expand into provision of financial services by investing in either a POS-like device by Action.able or a tablet or mobile phone equipped with Digipay. In both cases, small transaction fees are shared between agents and the fintech providers; merchants or billers get real time payments credited to their bank accounts, and just recently—bank deposits can also be made through the platforms. The fees are small relative to the transportation costs of reaching banks in geographically remote areas.

“It’s a financially sustainable solution, and a win all the way around,” explained Lauren Hendricks, Executive Vice President of Grameen Foundation. “Recruiting female agents benefits end clients, but also the female agents who typically see an increase in their own income of at least 20 to 30 percent.”

“The Bangko Sentral ng Pilipinas has been very progressive in opening up their doors so fintech companies like our partners Action.able and FSG Technologies can truly do legitimate business that extends the financial services beyond the borders of formal banks. For that, we are truly grateful and we are really hopeful that with these alternative channels, financial inclusion can be had at a more rapid pace.” Gatti concludes.

The approach could benefit women in other emerging economies as well, since women are generally more financially excluded than men. Globally, 1.1 billion women lack access to financial services, and only 40 percent of bank accounts are owned by women.

CAN’s accomplishments were celebrated during a conference on April 12: “The CAN Experience: Digitizing Financial Services for All.” More than 100 people attended, and speakers included Undersecretary Philip Francisco Dy, representing the Vice President of the Philippines; Ellen Joyce Suficiencia, Acting Deputy Director, Inclusive Finance Advocacy Office of the Central Bank of the Philippines; J.P. Morgan’s Senior Country Officer Roberto Panlilio; and Lauren Hendricks, Executive Vice President of Grameen Foundation.

Grameen Foundation has two new publications summarizing CAN’s work and lessons learned: Catalyzing Financial Inclusion: The Case of Grameen Foundation’s Community Agent Network Program in the Philippines and Know Your Agent Network: An Agent Manager’s Guide to Key Performance Indicators. A new CAN video featuring interviews with CAN agents is also available.

About Grameen Foundation

Grameen Foundation is a global nonprofit whose mission is to enable the poor, especially women, to end poverty and hunger. It uses digital technology and local partner networks to create breakthrough solutions—spanning financial, agricultural and health services—that bring people the tools and opportunities they need to help themselves.