Inclusive Finance: How Companies Can Empower Employees Through Financial Inclusion

In today’s fast-paced world, financial well-being is more important than ever. As an employer, you have the power to make a meaningful impact on your employees' lives through inclusive finance. By fostering financial inclusion in the workplace, you’re not only improving your employees' quality of life but also empowering them to reach their full potential. Let’s explore what inclusive finance is, its benefits for companies, and actionable strategies you can adopt to make a difference.

What is Inclusive Finance?

Inclusive finance refers to making financial products and services accessible, affordable, and equitable for everyone—regardless of income level, location, or financial literacy. It’s about ensuring that your employees have the tools and opportunities they need to manage their finances effectively.

For many workers, financial barriers such as limited access to banking, credit, and savings options create stress and hinder productivity. By embracing financial inclusion, you can help bridge this gap and foster a more empowered workforce.

How Does Inclusive Finance Benefit Companies?

Inclusive finance isn’t just about doing the right thing—it’s also a smart business move. Here’s how it benefits your organization:

1. Boosts Employee Satisfaction

Employees with access to financial tools and education feel more secure, leading to higher engagement and loyalty.

2. Improves Productivity

Financial stress can lower focus and efficiency. Inclusive finance initiatives alleviate this burden, helping employees thrive.

3. Strengthens Reputation

Companies that champion financial inclusion are seen as socially responsible, which enhances your brand image.

4. Reduces Turnover Rates

A financially empowered workforce is less likely to leave, saving you recruitment and training costs.

Strategies Companies Can Adopt for Financial Inclusion

So, how can your company lead the charge in fostering inclusive finance? Here are practical strategies to consider:

1. Financial Education Programs

Offer workshops or online courses on budgeting, saving, and managing debt. Financial literacy is a key step toward inclusion.

2. Earned Wage Access (EWA) Solutions

Introduce an EWA solution to allow employees access to earned wages before payday. This gives them a safety net for unexpected expenses without resorting to high-interest loans.

3. Partnerships with Fintech Platforms

Collaborate with fintech providers to offer accessible banking options, microloans, or digital wallets tailored to employee needs.

4. Savings and Investment Plans

Help employees save for the future through company-sponsored savings plans, matched contributions, or financial rewards for meeting savings goals.

Examples of Inclusive Finance in the Philippines

Despite the Philippines achieving steady economic growth—averaging a 6.6% annual increase since 2012. However, poverty and income inequality remain significant challenges, largely due to limited financial inclusion among low-income populations. 

Efforts to address these issues have led to notable improvements in financial access points and usage, as highlighted in the Bangko Sentral ng Pilipinas (BSP) Financial Inclusion Dashboard for 2023. The intended progress is as follows: 

• Deposit Accounts: As of the second quarter of 2023, the number of deposit accounts increased by 23.3% to 112.2 million, and the number of depositors rose by 23.8% to 104.7 million.

• Deposits and Loans: The amount of deposits grew by 8.1% to 17.8 trillion pesos, and the amount of loans increased by 8.5% to 11.6 trillion pesos.

  
  

Additionally, the number of electronic money agents saw a significant increase of 134.4% from 2019 to 2023, reaching 84,299 agents. This expansion in electronic banking services has contributed to greater financial inclusion, especially in rural and underserved areas.

A number of key initiatives have been instrumental in driving these improvements and fostering inclusive finance across the country, such as:

1. Supporting Structural Reforms

The French Development Agency (AFD) has supported public policy reforms to promote inclusive banking services since 2019. The Inclusive Finance Development Program (IFDP), co-financed with the Asian Development Bank (ADB), involves a 100-million-euro sovereign loan to the Philippine government. This initiative aims to build a more inclusive financial system by addressing structural challenges.

2. Modernizing Rural Banks

For over 80 years, rural banks have been critical in providing financial services to underserved populations in the Philippines. To remain competitive, these banks must undergo digital transformation.

To support this, AFD partnered with the Rural Bankers Association of the Philippines (RBAP) through an 800,000-euro grant agreement. This initiative funds training, capacity building, and modernization of core banking systems to improve rural banks' services and reach. Leaders within RBAP have emphasized how these efforts could revolutionize smaller banks, particularly those serving marginalized communities.

3. Enhancing the Main Financial Regulator

The Bangko Sentral ng Pilipinas (BSP), as the country's financial system regulator, is focused on building an inclusive digital finance ecosystem that caters to various sectors, including agriculture and MSMEs.

In September 2021, AFD and BSP signed a 700,000-euro grant agreement to enhance BSP's capacity in promoting inclusive digital finance. This grant supports initiatives like leveraging technology for financial regulation, fostering digitalization in rural businesses, and developing policies for agricultural insurance.

These examples showcase how inclusive finance efforts in the Philippines are addressing systemic barriers, fostering innovation, and creating opportunities for underserved communities. These initiatives provide valuable insights into how companies can emulate or build upon similar models to empower their employees and support financial inclusion goals.

Enhance Your Employee Retention with Inclusive Finance Solutions

As the leading Earned Wage Access provider in Asia and approved by central banks, Paywatch supports inclusive finance by offering an innovative EWA solution for businesses looking to implement a flexible payroll strategy. Our platform integrates seamlessly with your company’s payroll process, ensuring secure and compliant services that provide employees with crucial financial flexibility. With Paywatch, you can enhance work-life balance, reduce financial stress, and support broader financial inclusion goals.

Ready to empower your workforce and foster a financially inclusive workplace? Contact us today to learn how Paywatch can support your business in creating a motivated, loyal workforce through inclusive finance solutions!