FINANCIAL TECHNOLOGY players (fintechs) need to step up amid the shift to a digital economy due to the coronavirus pandemic to boost services for small businesses which are among the most vulnerable to the crisis, said Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno.

In a webinar organized by industry group, Mr. Diokno said fintechs have a much larger role to play to ensure a more “inclusive and prosperous” economy after the pandemic.

“Fintechs can offer turnkey loan origination and underwriting platform for the government’s direct lending programs. Another could be digital solutions for MSMEs (micro-, small- and medium-sized enterprises) pivoting to e-commerce,” he said in his keynote speech during the webinar on Wednesday.

Mr. Diokno pointed to the role of MSMEs in the economy, noting that they represent 99% of total businesses and generate about two-thirds of the country’s employment.

“When the SMEs are having a hard time, the multiplier of that for the employees will be harder..,” BSP Managing Director of the BSP’s Center for Learning and Inclusion Advocacy Pia Bernadette Roman-Tayag said in a forum that followed Mr. Diokno’s speech.

The BSP has rolled out regulatory relief measures meant to boost credit to smaller businesses, including the temporary reduction in the risk weight of loans secured by MSMEs and the zero risk weight given for MSME exposures of banks for those covered by guarantees of the Philippine Guarantee Corp., the Agricultural Guarantee Fund Pool and the Agricultural Credit Policy Council.

Moreover, the BSP has also encouraged lending to the sector by counting new MSME loans as part of banks’ reserve requirement compliance.

With more businesses feeling the effect of the virus and the need for fresh funds to continue operations, fintechs could help provide a lifeline to these small businesses and private consumers as well, according to Mr. Diokno.

“Some fintechs can serve as digital payment channels while others can offer last-mile lending conduits like cooperatives and microfinance institutions a shared digital platform to better serve and reach more clients,” he said.

“We’ve seen the digital adoption of consumers…The fintech players can now serve as conduits for MSMEs,” said Angelito “Lito” M. Villanueva, chairperson of and Rizal Commercial Banking Corp. executive vice-president and chief innovation and inclusion officer.

Data from the Department of Trade and Industry showed transaction values of fintechs have hit roughly $5.8 billion in 2018, which is expected to climb to $10.5 billion by 2022. Fintech players account for more than 130 of the over 500 start-ups in the country.

Mr. Diokno also acknowledged the role of fintech players in achieving the BSP’s target to have 50% of transactions done digitally and to have 70% of Filipinos included in the formal financial system. — Luz Wendy T. Noble