Community-based ATMs expand financial inclusion in far-flung areas

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    Krystal Bantic, left owner of Ivee’s Sari Sari Store and a Cash Agad partner agent in Quirino, Cagayan Valley facilitating a withdrawal transaction.

    Both entrepreneurs and workers in MSMEs are the hardest-hit by the economic disruption due to the pandemic. There are nearly 1 million MSMEs in the country and data from the Department of Trade and Industry indicated that more than 50 percent of this number or around 525,000 have closed their businesses.

    On the macro level, the Asian Development Bank said the Philippine economy had bottomed out in May or June and that for the rest of the year, economic contraction is projected at 7.3 percent by end of 2020. Recovery is expected to happen by 2021 when the pandemic is hoped to be contained and the economy is expected to bounce back by 6.5 percent.

    But even with the prevailing economic slowdown, the country has been observing signs of gradual recovery especially in some of the MSMEs.

    One of them is Krystal Bantic of Quirino province in the Cagayan Valley region. Krystal runs a grocery store in her town and she became a Cash Agad partner agent last year.

    “Krystal’s experience really shows how the Cash Agad service expands financial inclusion in far-flung, hard-to-reach areas in the country. The result is a boost to the local economy.

    Established businesses earn more. More businesses are set up. The engine of local economic activity is revved up and eventually, there’s improved quality of life for the residents.

    “If the country’s economy is ever going to bounce back from the pandemic, it will take all of us – big businesses, MSMEs, and both urban and rural communities and their local governments – to help each other and do our part. There’s a certain inspiration, a beautiful sort of hope when you see communities working together to rise up and recover from a crisis. BDO is doing its part in helping communities recover economically through the Cash Agad network,” said Jim Nasol, Head of Agency Banking, BDO Unibank.

    Cash Agad is a service provided by BDO to far-flung and unbanked communities where residents have little to no access to bank services. Many faraway places in the country do not have banks or ATMs where residents may conveniently get cash.

    This is due to several reasons.

    It could be that communities are located in distant islands where motorized boats are the only means of transportation. Some towns and barrios are located in mountainous or hilly areas with rocky and uneven terrain. Others are separated by sheer hundreds of kilometers from urban areas and have no concrete roads nor highways. All of these factors and more prevent banks from building and maintaining physical branch offices in these faraway towns.

    The Cash Agad service provides a simple, elegant, and practical solution to all that. By partnering with stores and shops already established in the community, BDO turns them into community-based ATM terminals. The shop owner receives a POS terminal for use in transacting locally-issued ATM cards, whether debit or prepaid and facilitates basic transactions like cash withdrawals and balance inquiries.

    Best of all, Cash Agad accepts transactions using ATM cards from different local banks and non-bank financial institutions in the Philippines, not only those from BDO. It’s really a service that benefits entire communities.

    According to Krystal, she actually had few customers availing of Cash Agad in her grocery store in the year before the pandemic struck. This was because at that time, people were used to traveling all the way to Candon City in Ilocos Sur province, which is more than four hours away from Quirino, in order to go to banks and ATMs, enjoy fast food restaurants, and buy essential goods.

    “People would make the trip to Candon even though it’s quite far because it was a mix of both business and leisure for them. Also, goods are priced lower in Candon because over here in Quirino our shops are simply getting our goods from there as well,” said Krystal.

    The pandemic caused subsequent lockdowns and quarantines which prevented people from leaving Quirino as they were used to. This meant that their usual access to cash (banks and ATMs) and goods in Candon was closed off. But fortunately, Krystal and her Cash Agad kiosk at her grocery store was available.

    “ None of us could leave. The local government ordered all transportation to stop. No one was allowed to go out. People had nowhere else to go to get needed cash to spend for food and other basic needs. So more and more people come to my store not only to withdraw cash but also to buy essential goods,” said Krystal.

    Krystal faced her own challenges as a Cash Agad partner agent. She was also covered by the travel ban so she could not easily replenish the cash reserves meant for Cash Agad withdrawals. She was able to solve this by either renting a private vehicle to go to the BDO branch in Candon to get cash or she would get the help of the local government to provide transportation to Candon. After all, Krystal had become a frontliner and essential worker since she was the only source of cash for the residents in her town.