Improving the financial inclusion of populations

The Philippines is experiencing a relatively strong growth trajectory, yet it is not an inclusive one. A variety of factors contribute to poverty and inequality, among which the low financial inclusion of populations – that is, limited access to the supply of financial products and services – is a significant factor. In 2017, only 34 % of the population had access to banking services. This low inclusion rate applies to all financial services.

Furthermore, the financial market is fragmented among numerous actors with varying sizes and statuses. The Filipino state and financial regulators address this issue by developing an institutional and regulatory environment that is particularly favorable to financial inclusion. AFD’s support is part of the National Strategy for Financial Inclusion (NSFI), a common reference for stake-holders in the sector since 2015.

The specific objectives of policy-based loan are to contribute to:

• Strengthen the institutional and regulatory environment for financial inclusion;
• Improve market infrastructures (payments, risk management, guarantee mechanisms);
• Enhance the capacities of the supervisor and financial service providers. 

The purpose of this public policy loan is to contribute to the overall goal of inclusive growth in the Philippines by improving the financial inclusion of marginalized populations, especially rural populations and women.