MICRO, small and medium enterprises (MSMEs) play a crucial role in the Philippine economy — comprising 99.5 percent of all registered businesses in the country and providing 65.1 percent of total employment, according to the Department of Trade and Industry (DTI).
The government’s Small Business (SB) Corp. has allocated P10 billion in funds to support the 2023-2028 MSME Development Plan. This plan includes the integration of contemporary digital solutions to fortify MSME capabilities, helping them comply with and excel within the rapidly evolving technological landscape.
However, are MSMEs ready for digital transformation? We often hear about financial literacy, which entrepreneurs should be familiar with. However, proprietors must appreciate as well the concept of digital literacy and embrace digital transformation in their business operations.
Digital literacy is the ability to search, evaluate and communicate information through technology. Besides using digital tools, it is also about knowing how to use them effectively and responsibly. It is as empowering as financial literacy because it helps business owners navigate technology confidently.
Usually, the information technology (IT) department of an office paves the roadmap toward digital transformation. But not all MSMEs have their own IT unit. The most practical way to deal with this situation is to assess the present condition of a particular business vis-a-vis its potential for development — from which the appropriate digital solutions can be applied for efficiency and productivity.
A case in point is the traditional method of formalizing agreements or documents through wet signatures. For a financing company servicing a huge market of Overseas Filipino workers (OFWs) such as Wisefund Finance Corp., which provides non-collateral loans to migrant workers, securing wet marks on contracts is a big challenge.
Limitations in terms of the number of the company’s physical branches and the borrowers’ geographical location while at work are major constraints as well. The process of sending the loan agreements via e-mail and parcels to allow the co-borrowers to personally sign in Wisefund offices and complete the transaction takes three to five days.
For OFWs whose priority is to spend as much time with their family before leaving abroad, time is gold. Requiring them to travel and personally appear in the office causes annoyance and eventually leads to the cancellation of their loan application.
Frustrated and exhausted with the complexity of the traditional processes, Wisefund explored solutions to address the needs of its target market to become true to its mission of providing fast and convenient services to Filipinos anywhere in the world.
Wisefund embraced digital transformation and leveled up with the competition by introducing an e-signature solution to the company. From its limited brick-and-mortar operations to being online anytime worldwide to reach qualified OFWs with just a click of a finger on their mobile phones, Wisefund has expanded and maintained its competitive advantage.
The move to pursue initial steps in digitalization helped Wisefund address regulatory compliances and provide immediate responses to its collection partners as well. The tedious process of digitization of customer records (Digicur) became a thing of the past — no more heavy folder retrieval and continuous file scanning, and instead a simplified uploading of customer records in real time.
A significant cost reduction in terms of lesser paper consumption has become an initiative to support the environmental sustainability campaign of Wisefund’s parent company, South Asialink Finance Corp. This effort helped unlock new opportunities to further grow the company and serve its bigger purpose to assist OFWs.
The financial performance of Wisefund showed impressive figures, which allowed it to secure various credit lines from local banks and private investors to sustain its funding requirements.
This year, Wisefund is on its way to hit P1 billion in total sales.
Belynda Castro is the chief operating officer of Wisefund Finance Corp. She is a former relationship manager from a universal bank with stints in asset management, consumer banking, and corporate banking. She has a degree in Economics and recently earned a certificate in the Leadership and Management Development Program of the Ateneo Graduate School of Business-Center for Continuing Education.
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