Third worldwide: Philippines still Asia’s microfinance leader – EIU

MANILA, Philippines - The Philippines maintained its rank as the microfinance leader in Asia and the third best in the world this year, according to a survey conducted by the Economist Intelligence Unit (EIU).

 The country got a score of 81 in the Global Microscope 2015, which assessed the regulatory environment for financial inclusion in 55 countries.

The country’s score was Asia’s best and ranked third in the world, next to Peru’s 90 and Columbia’s 86. India placed fourth with a score of 71, followed by Pakistan with 64, and Chile with 62.

Haiti was ranked last with a score of 24.

“The Philippines continues to achieve considerable local and global milestones in its pursuit of financial inclusion, owing to the country’s success in terms of the variety of players, which provides a wide range of financial services and products to the public,” the EIU said in the report.

The countries were ranked based on 12 indicators including government support; regulatory and supervision capacity; prudential regulation; regulation and supervision of credit portfolios; regulation and supervision of deposit-taking activities; and regulation of insurance targeting low-income populations.

The metrics also included regulation and supervision of branches and agents; requirements for non-regulated lenders; electronic payments; credit reporting systems; market-conduct rules; and grievance redress and operation of dispute-resolution mechanisms.

The EIU, a unit of global business magazine, The Economist, said the Philippines attained perfect scores in five indicators including government support, regulation and supervisory capacity, deposit taking activities, branches and gents, and dispute resolutions.

It hailed the recently launched National Strategy for Financial Inclusion by the Bangko Sentral ng Pilipinas (BSP) and 13 other agencies.

“The strategy establishes a framework and action plan for the government and the private sector to take a coordinated and systematic approach to the development of a financial system that is accessible and responsive to the needs of the entire population,” the EIU explained.

Through the BSP’s financial inclusion strategy, EIU said there have been increased opportunities for partnership with the private sector, especially in the area of technological innovation.

“In terms of financial capability, the BSP implements economic and financial-education programs to reach audiences in targeted areas, as well as public information campaigns, financial-education sessions for Filipinos overseas and their beneficiaries, financial-education exhibitions and financial-empowerment sessions,” EIU said.

In terms of improvement, the EIU said the country needs to undertake market innovations, particularly technology-driven initiatives that will make microfinance more inclusive. Financial education as well as consumer protection initiatives were also highlighted.