The last two years have been tough for everyone from the global pandemic to the crumbling of the global economy. Despite this, the Philippines remains one of the fastest-growing economies in the entire world. As the country continues to recover from the pandemic and implement economic reforms, one sector of the economy has remained unscathed – the digital economy.
Let's take a look at how cryptocurrencies and blockchain are shaping the future of financial accessibility in the Philippines and all over the world and the big role that blockchain companies are playing in it.
What is financial inclusion?
Financial inclusion refers to achieving financial access for all segments of the population in a country without discrimination of any kind. This includes the low-income segment of the population that does not have bank accounts or easy access to cash, owned by women or minorities who are financially excluded, and young people who have no access to formal financial services.
Financial inclusion also allows people to freely participate in financial activities and have access to basic financial services such as savings and credit, as well as insurance and other financial products such as mortgages and loans for business ventures. Financial inclusion benefits both individuals and the entire economy of a country by increasing investment and increasing income growth for households.
Financial inclusion includes the access of people to affordable financial services such as loans that help them manage their finances more easily and allowing them to pay for their basic needs such as food, health care and education without needing support from family members or friends.
Financial Inclusion in the Philippines
The Philippines has a great need for financial inclusion because only 30% of its households are financially included compared to 85% in Singapore and 70% in Indonesia based on the 2017 Global Findex data by the World Bank Group. The limited financial inclusion hinders the country’s efforts to increase the national GDP by 6-7 percent.
- 7/10 adult Filipinos are financially excluded and don’t have a bank account. More people have a cell phone than those that have bank accounts.
- Only 27% of the lower class have bank accounts, while 72% of the upper class do.
- 51% of Filipinos keep their savings at home - doing nothing with it while inflation makes their savings worth less every year. Obviously, Finblox would love to help with that problem - but more on that later.
- 44% of borrowers borrowed their money from family and friends, rather than institutions. This obviously isn’t a very healthy habit, as it can introduce tension to your personal relationships.
What are the barriers to financial inclusion?
Many people have limited access to financial services because of a lack of physical or financial infrastructure in low-income areas or a lack of financial education regarding necessary skills to use financial products and services efficiently.
The most common types of financial services are savings accounts, credit facilities, insurances and remittances. However, many Filipinos have limited access to such financial services because of limited networks or the high costs of such services and products. This makes it difficult for people to save and make investments that can help them build a better future for themselves and their families.
How can crypto help drive financial inclusion?
Through cryptocurrency, however, people can now save and make investments even in remote areas of the Philippines without relying on traditional financial institutions or intermediaries. This makes cryptocurrency a secure and cost-efficient alternative to traditional finance that enables people to access financial services that were previously out of reach for them.
One major concept of financial inclusion is equality. To be included means being treated the same as everyone else in society. With crypto, your identity is hidden, and everyone is treated equally.
Signing up for a crypto account is also much easier than it is to sign up for a bank account. In most cases, you can even trade and transfer small amounts of money without any documentation. If you want to enable more features, you need to complete the KYC process which simply requires one ID, and one proof of address.
Crypto Savings Accounts as a Tool for Financial Inclusion
The inflation rate in the Philippines for 2022 was 3%. In contrast, most banks offer you 0.1 - 0.25% on their savings interest accounts. That means money you hold in a traditional bank account is steadily losing value every year due to inflation. It’s no wonder that most people don’t see them as attractive, and why financial inclusion is still an elusive concept.
That’s where crypto companies like Finblox come in. Finblox wants to facilitate financial inclusion in the Philippines by utilizing blockchain technology and by offering high yield rates on digital assets such as USDC, AXS, and ETH among many others. Finblox wants to help Filipinos attain financial rights to which they can access at any time.
Peter Hoang, the CEO & Co-Founder of Finblox, explains: "Financial inclusion is not only about providing access to the financial services—it is also about providing wealth building tools for everyone to be able to grow their assets. The greatest opportunity to expand financial access is making financial services relevant to people’s lives. And that biggest relevance is giving everyone the ability to earn and grow their wealth”
With crypto savings accounts, you can earn anywhere from 5-15% on the value of your assets every year. For example, Finblox offers up to 15% yield on stablecoins. These are pegged to the value of the dollar, meaning that you don’t really have to worry about volatility. And you’d steadily earn 15% every year. Finblox even offers up to 90% on crypto assets - compounded and paid daily.
Financial Inclusion + Wealth Building = Financial Freedom
Achieving financial freedom starts with financial inclusion. As more and more Filipinos get financially included with the help of cryptocurrencies and blockchain technologies, more individuals will attain financial freedom and independence sooner rather than later.
Finblox Blog is associated with Finblox - a reliable cryptocurrency earnings platform where you can buy and earn passive income on your digital assets.