With many small businesses struggling to survive, one fintech company’s female leaders push for greater inclusion among women entrepreneurs
“Seems like yesterday that we didn’t even have a roof, let alone a store,” Gina says, as she opens her panciteria for the day. Located in their small garage beside their house just outside Manila, the eatery serves arroz caldo, lugaw and pancit to its loyal patrons, who have gradually returned as quarantine restrictions lifted.
With hungry customers filling in seats, the roofed open-air eatery provides a safe and sheltered space for diners to enjoy a hot bowl of lugaw—and provides a steady source of income for Gina’s family. But it wasn’t always this way.
“When we started our lugawan business six years ago, all we had was a bicycle, and we would ride around our neighborhood with as much hot lugaw as we could carry,” Gina recalls. “This meant that our menu and sales were limited, and if it ever rained that day and we couldn’t go out, it meant that we would not have any sales at all. We needed our own roofed puwesto but had no funds for it.”
Gina is not alone. According to the 2019 List of Establishments of the Philippine Statistics Authority (PSA), MSMEs accounted for 99.5% of business enterprises in the country. However, a recent paper by the Asian Development Bank Institute (ADBI) revealed that MSMEs faced a serious lack of funds during the pandemic, with 61.4% of medium-sized, 53.1% of small, and 37.8% of microenterprises reporting that they would run out of funds within a month. Gina is also one of 29.5 million Filipino adults with loans, 38% of which are women, based on the Bangko Sentral ng Pilpinas’ (BSP) Financial Inclusion Survey.
These high numbers should come as no surprise in a country where women are often decision-makers in the household. According to the recent National Demographic and Health Survey, 89% of female respondents are responsible for managing their household budgets and making financial decisions.
So perhaps it should also come as no surprise that for the company that gave Gina a cash loan for her business, majority of their customers are women as well.
“Three out of five of our customers are women, including homemakers, breadwinners and small business owners,” explains Sheila Paul, chief marketing officer of Home Credit, a Prague-based financial services provider that offers loans in over 7,000 partner stores nationwide as well as a host of digital financial services through their My Home Credit app.
“Aside from this, many of our loan customers are either unbanked or first-time borrowers, so we are trying to bridge gaps in financial inclusion for these underserved sectors,” she adds.
With the financial challenges of the new normal, the demand for loans and other financial services is high as ever, leading to the popularity of non-banking finance institutions and online lending apps. But it was Home Credit that first introduced the concept of “consumer finance” to the country more than seven years ago, as it began offering in-store financing of smartphones, appliances and other goods, even without a credit card and needing only simple requirements for fast approval. Today, Home Credit’s business model is highly digitized, with customers able to apply for gadget loans via the app, and later become eligible for cash loans as they build their credit history. The app, now with more than 1.2 million users, offers a slew of features, from self-service tools for account holders to the ability to online shop in-app as well as make QR payments in partner stores.
Companies such as Home Credit are aware that technology is a must-have for Filipinos from all walks of life to successfully navigate the new normal. And with many women in need of inclusive digital financial services, then perhaps it is fitting that Ms. Paul is joined by several other women leaders in Home Credit’s executive committee in providing this service.
“We believe that the best kind of technology is the kind that is accessible to everyone, and allows for services that can uplift lives,” says Susan Ong, Home Credit’s chief information officer. “Through technology, we not only make our loan applications faster and simpler, we make it safe and secure. And our mobile app is rapidly expanding to provide everyday service to the consumers – from loyalty discounts, to marketplace purchases, to bills payment and loads top-up. What’s exciting is our Filipina consumers are equally at the forefront in embracing this digital lifestyle.”