OXFAM and PayMaya, along with partners from the government, private sector, and civil society, strengthen the call for financial inclusion through digital financial services. The activity was part of the Cash In Hand” Learning Brief launch where Oxfam and PayMaya shared best practices on how electronic cash transfers have proven to be effective in helping build more resilient communities, especially in times if disasters and emergencies.
The use of digital financial services platforms for humanitarian cash transfers plays a key role in the early recovery of Filipinos affected by disasters by giving them access to financial services and helping jumpstart local markets.
This was among the findings in the study called “Cash in Hand”, which was launched by international development organization Oxfam Pilipinas, together with digital financial services leader PayMaya.
The study, which is based on experience in responding to emergencies in Mindanao and typhoon-affected parts of the Philippines, showed that inclusive and efficient financial services improve people’s welfare, hasten the delivery of social benefits, spur economic activity, reduce transaction costs, and incentivize innovations in both the private and humanitarian sectors.
Financial inclusion is similarly correlated with the reduction of economic inequality by providing means for poor people to overcome barriers to access to financial services, which arise from their lack of information, collateral, and credit history.
In this regard, digital financial products such as the PayMaya e-wallet and card, in conjunction with on-ground, grassroots access through its nationwide Smart Padala agent network, provide the much-needed pathways for timely and efficient disbursement of financial aid, and the eventual use of funds for recovery after the crisis.
“Our experience and ongoing research on cash programming has shown us that using digital financial services platforms for cash assistance helps stimulate local economies. This becomes an entry point for financial inclusion because the poor and unbanked can use financial products to manage risks, grow savings, and access credit to diversify their livelihood opportunities,” Oxfam Pilipinas Country Director Lot Felizco said.
“Access to digital financial services like PayMaya can help make lives better for Filipinos. Our partnership with Oxfam is a clear testament to how we can empower the most vulnerable sectors of society through innovation. This is at the heart of what we do at PayMaya and we will continue to support similar initiatives,” said Shailesh Baidwan, President of PayMaya.
Data from the 2017 Financial Inclusion Survey of the Bangko Sentral ng Pilipinas showed that almost seven out of ten Filipino adults are still considered financially excluded, having no formal access to financial services like savings, micro-insurance, micro-credit, payments, and remittance.
A Bangko Sentral ng Pilipinas 2017 report also noted that almost one-third of the total number of municipalities and cities in the Philippines have no bank or automated teller machine. Only 44 of the 143 municipalities in Eastern Visayas have banks. It is even worse in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), where only ten municipalities out of 118 have at least one bank.
“The Bangko Sentral ng Pilipinas has always been supportive of efforts to give more Filipinos access to much-needed financial products that can help support and improve their everyday lives. In the iAFFORD program, the BSP sees a remarkable example of collaboration and innovation to empower the financially excluded. It is the kind of endeavor we envisage and hope to propagate as we continue to spearhead the implementation of the National Strategy for Financial Inclusion (NSFI). The stories of iAFFORD beneficiaries prove that maximizing our common resources, developing accordant interventions based on a singular vision, and applying the right innovations can uplift the lives of many and provide them the means for recovery,” said Pia Roman-Tayag, Managing Director of the Bangko Sentral ng Pilipinas Center for Learning and Inclusion Advocacy.
Eastern Visayas and BARMM are Oxfam’s priority areas for humanitarian and development programming. From 2016 to 2018, Oxfam and its partners reached about 42,000 individuals through the IAFFORD (Inclusive and Affordable Financial Facilities for Resilient and Developed Filipinos) Project.
The project also provided 11,538 people, a majority of whom are women, access to digital and conventional financial products for life and livelihood assets protection.
Through this initiative, Oxfam and its partners hope to strengthen collaborative efforts amongst development agencies, the government, and the private sector, and further contribute to efforts to reduce poverty and vulnerability.
Oxfam is a global non-profit organization that works in more than 90 countries, including the Philippines, to address the underlying problems of poverty and inequality.