Financial technology-driven Shari’ah-compliant microfinance is key to accelerating financial inclusion in the Autonomous Region in Muslim Mindanao (ARMM), an executive of FINTQ, the financial technology arm of Voyager Innovations, said.
Speaking at the 7th Global Islamic Microfinance Summit in Istanbul, Turkey, FINTQ Managing Director Lito Villanueva said that there is a need to push for an enabling framework for Islamic microfinance in the Philippines in order to break down the barriers in accessing digital finance.
“We are not telling the whole story of financial inclusion if Islamic banking and finance are absent in the equation. There is an urgent need to push for legislation, infrastructure support, and technology enablement for Islamic microfinance,” said Villanueva, the only Filipino and non-Muslim fintech executive included in the roster of speakers.
In the Philippines, around 5.6% of the population are Muslims, with a geographic concentration in the ARMM, composed of five provinces, two cities, and 116 municipalities.
“ARMM has so much potential given its resource-rich landscape. Combined with its industrious population, the region has huge economic potential. However, from the time it was established in August 1989, ARMM remains the poorest region in the country with less than 70% of the adult population still unbanked and underserved. There are only 20 banks and 28 ATMs servicing almost 4 million ARMM residents. Not a single bank there is Shari’ah compliant. That’s why there is an opportunity to better serve and enable the communities with Islamic microfinance, enabled by financial technology.”
Villanueva calls on industry players to support the creation of a task force to look into establishing a Shira’ah-compliant Islamic microfinance framework. The task force was proposed to be led by the existing Microfinance NGO Regulatory Council, which was created by Republic Act No. 10693 or “Microfinance NGOs Act.” The council is chaired by the Securities and Exchange Commission (SEC) together with the Department of Finance, Department of Social Welfare and Development, and the Department of Trade and Industry, and in partnership with the Bangsamoro Transition Commission and the National Commission for Muslim Filipinos.
Tags: ARMM, financial technology, Financial technology to help push Islamic microfinance in Mindanao, Islamic banking and finance, Lito Villanueva, microfinance in the Philippines, Microfinance NGO Regulatory Council