At the recently held American Chamber of Commerce and Grab Philippines’ hybrid webinar Digital Innovation: Advancing Financial Inclusion for MSMEs, industry leaders discussed the need for financial inclusion among micro, small, and medium enterprises (MSMEs). Speakers Bernadette Romulo-Puyat, Deputy Governor of the Bangko Sentral ng Pilipinas (BSP), and Erwin Yamsuan, Head of Lending of Grab Financial Group Philippines, and panelists Kelvin Lester Lee, Commissioner of the Securities and Exchange Commission; Ellen Joyce Suficiencio, Director of the BSP; Floredeliza Leong, VP for Advocacy, Communications, and Special Concerns of PHILEXPORT; and Rose Ferrer, a business strategist, considered key opportunities for financial inclusion to support our MSMEs.
The event started out with the country’s progress on digital transactions reporting 6 out of 10 Filipinos now regularly make online transactions. Romulo-Puyat shared, “From just being a tool for saving and safekeeping, an account has become a tool for convenient transactions any Filipino can benefit from.”
However, according to Erwin Yamsuan, Head of Lending of Grab Financial Group Philippines, only 4.8 percent of Filipino MSMEs obtained loans from banks during the COVID-19 pandemic, resulting in as much as 79 percent of MSMEs cited a lack of working capital in post-COVID times. This means that businesses continue to be constrained to financial access. In addition, Yamsuan cited poor physical reach and lack of readily-available, comprehensive information as key structural gaps that prevent institutions from effectively loaning.
Yamsuan recognized how fintech can come in to support MSMEs through three advantages: enabling extensive accessibility or for consumers to use fintech services wherever they may be; creating ecosystem synergies between businesses, lowering their possibility of being seen as at-risk; and the growth of AI technology by leveraging on data to reduce credit risk and increase consumer value, allowing one to score higher approval rates. He shared, “Fintech can be a powerful complementary force to traditional financial institutions for financing MSMEs. It has emerged in recent years with the promise to deliver value to customers and business through innovations.”
Yamsuan shared how Grab supports MSMEs through Quick Cash, the loan assistance program under Grab Financial Group. Quick Cash utilizes Grab’s data to determine tailor-fit loan amounts to every merchant. In addition, daily micro-deductions are also done to help merchants track their loan payments; loan disbursal is also markedly shortened, with merchants provided with capital within a week.
Yamsuan also cited recommendations for digital lending to be further seen as a viable financing solution. He stressed the importance of financial education programs as a key way to start.
Yamsuan mentioned the opportunity for a regulatory sandbox to enable the development of digital financing products and regulations in a more controlled environment; as well as considering grants and incentives to further encourage the market to embrace digital financing.
GrabFood and GrabMart merchants can easily apply for Quick Cash through Grab’s website. With no documentation required apart from merchant details, entrepreneurs can expect their loan capital transferred to them within a week to let them readily grow in their business.
Be updated on Quick Cash and Grab’s other financial services through Grab’s Facebook and Instagram, and check out https://www.grab.com/ph/merchant/finance/hub/products/.