Causes of economic growth
The president of the Philippines, Rodrigo Duterte, is subject to severe criticism because of numerous human rights violations, but he certainly knows how to conduct economic policy: the country has surpassed even China in terms of growth, Forbes writes.
According to September data, the Philippine economy grew 6.9% year-on-year, the highest for this country since the third quarter of last year. It slightly exceeds the achievement of China, which in the third quarter of 2017 demonstrated an economic growth of 6.8% year on year (the lowest level since the end of last year).
The World Bank predicts that by the end of 2017 the economy of the Philippines will grow from the current 6.9% to 7.5% and will take the tenth place in the world in terms of growth. On average, for the country from 1982 to 2017 this indicator was 3.72%, the record was reached in the fourth quarter of 1988 (12.40%), the anti-record in the first quarter of 1985 (-11.1%).
Money for a living. How quick online loans help fight poverty
Because of the high level of informal employment and relatively low incomes, citizens do not have access to traditional financial institutions. But they have access to financial organizations. It so happened that it is the microfinance institutions in the Philippines that have accumulated a lot of expertise in working with people whose income does not exceed 10,000 pesos.
These companies have a huge resource, infrastructure, technology and experience that can be used.
Credit companies are actually a basic financial instrument for a whole population that ignores banks because of high risks and low profitability of small loans.
From research, we learned what our clients take on loans. A significant part was related to urgent needs – payment of housing and communal services, repair of equipment, medical services and expenses for the journey to relatives, when they delayed their salaries. There are a huge number of people whom the state and banks, it seems, just do not notice.
Financial Aid to Small Businesses
In the Philippines, with the help of credit services can develop the development of individual entrepreneurship. According to the latest data, the share of citizens in the total portfolio is 80%, individual entrepreneurs – 10.4%, companies – 9.6%. But, firstly, the share of entrepreneurs grows, and secondly, even among those who take a loan as a natural person, many are self-employed.
Companies also open access to loans to people without a credit history or with a damaged history and help to correct it. This, in turn, eventually opens up access for them to banking products, such as mortgages, car loans, loans for education and so on.
Progress and innovation
Rapid loans also increase the financial and technical literacy of the population. Every year the share of borrowers of older age groups, which use exclusively mobile applications for obtaining loans, is growing. For some, this is literally the next installed application after Viber and WhatsApp. When borrowers move to the next level of relations with financial institutions, becoming customers of banks, mobile and online banking is no longer exotic for them.
One of the lessons that the citizens of the Philippines have learned in recent years is better not to expect that the situation will someday improve by itself.
The choice is small – either hope for a miracle and do not take out the garbage in the evening and do not whistle in the house, or choose yourself with help, including, available financial instruments.
Written by Mikka Montero | Modified date: January 29, 2020