Financial Innovation: Transforming the Lives of Remote Island Residents in the Philippines

During a field visit to Talim Island on 23 May 2024, UNSGSA Queen Máxima spoke with a local fisher who has doubled his fish cage business since joining CARD-RBI and is safeguarding his livelihood with savings and life microinsurance products. Photo: Patrick van Katwijk

In the Philippines, a country with over 7,000 islands, remote communities face significant barriers to accessing financial services. CARD-MRI and Card Pioneer Microinsurance Inc. (CARD Pioneer) are having a transformative impact. CARD MRI Rizal Bank (CARD-RBI), a microfinance-oriented rural bank, is part of the CARD MRI group dedicated to eradicating poverty. Focused on empowering women and rural communities, CARD-RBI offers diverse financial services, including payments, savings, credit, and insurance. Their goal is to help the poor, especially in remote areas, transition from basic microfinance to comprehensive digital banking services, supported by “branch-lite” units and agent services.

One of their key partners in driving this transformation is CARD Pioneer, which offers innovative, customer-centric insurance products targeting low-income Filipinos. This collaboration has extended microinsurance coverage to CARD-RBI’s clients, providing affordable protection against various risks.

Talim Island, the largest lake island in Laguna de Bay, has 40,000 residents, many of whom face significant challenges such as widespread poverty, limited connectivity, and difficult access to the mainland. People used to have to travel at least a day to the mainland to do their banking activities—a costly, inefficient, and time-consuming trip. Now, since the construction of a new telecoms tower and CARD-RBI establishing a branch-lite unit and six active agents, costs have come down. Of the 1,350 clients CARD-RBI serves, 932 have active loans totaling PHP 15,643,146 ($271,000) and PHP 4,884,258 ($85,000) in savings.

The innovative use of the mobile app konek2CARD has been instrumental in delivering financial services to Talim Island. This app facilitates various banking transactions, including savings and loan balance inquiries, fund transfers, and agent-assisted transactions. By leveraging digital tools, CARD-RBI ensures that clients from even the most remote areas can have access to financial services.

Rosalyn Nido Villaflor exemplifies how CARD-RBI’s initiatives empower local agents. As a resident of Talim Island and an active member of CARD-RBI for nine years, she earns PHP 30,000 ($522) per month through her work as an agent, as well as through mobile banking transactions, fishing, and direct selling. Her membership with CARD-RBI has enabled her to open a savings account and significantly improve her family’s standard of living. Additionally, she gained a comprehensive understanding of insurance, benefiting from both life and non-life coverage through CARD-RBI’s programs.

As a konek2CARD agent, Rosalyn has qualified for various loans, maintaining a 100% repayment rate on 15 loans since 2015. She said her latest loan of PHP 150,000 ($2,600) is being used to enhance her business and assist fellow community members in accessing banking services.

Leonel Alviso, another beneficiary, has significantly expanded his fish cage business since joining CARD-RBI. Living on Talim Island, he initially joined to secure additional capital for his business. Over two years, Leonel has taken out five loans totaling PHP 130,000 ($2,260), all with a 100% repayment rate. He has doubled his fish cages from 10 to 20, and now generates PHP 50,000 ($870) every three months from fish sales. Additionally, he has savings and life microinsurance products to safeguard his livelihood.

The partnership between CARD-RBI and CARD Pioneer continues to evolve, offering innovative products designed to meet the needs of low-income and underserved populations. Ultimately, the efforts of CARD and Pioneer have bolstered the financial resilience of low-income communities, not only by financing livelihood programs or businesses, but also by providing insurance that enables individuals and businesses to rebuild and resume their lives and livelihoods after temporary setbacks caused by death, accidents, or calamities. These efforts provide financial security and foster economic resilience in remote communities. By combining comprehensive financial services, digital tools, and financial literacy programs, CARD-MRI and Pioneer are paving the way for a more inclusive financial ecosystem in the Philippines.