Distributive tradeThe pandemic-induced recession aggravated this lack of access to MSME financing—the ADB found that nearly half or 47.5 percent of the country’s entrepreneurs “used their own funds/retained profits to survive” in March and April when 75 percent of the Philippine economy stopped after the government imposed the most stringent COVID-19 lockdown in the region, which shut down thousands of businesses and shed millions of jobs.
In all, they surveyed 2,487 tricycle drivers aged 18 to 79, with the majority of them males and married. Also, “bank account ownership [with debit card] is higher among fintech drivers, but credit card and mobile banking as well as online shopping are not often used. They save, but mostly using cash-at-home and through informal savings groups; few use formal financial institutions to save,” the ADB said.
Constant monitoringAccording to the ADB, “fintech loans based on the IoT device as such provided by GMS is promising to enhance financial access for the self-employed or sole proprietorship—especially those in transportation and logistics—and to ensure their business survives under the new normal with improved living standards and social welfare.”