Views on Customer Empowerment: Findings from the Philippines
The objective of this qualitative research is to understand customers’ views and perceptions on customer empowerment. The research aims to help build the definition of customer empowerment and create an approach to facilitate increased customer empowerment through financial service providers (FSPs). A healthy state of customer empowerment can lead to appropriate selection, uptake, and sustained use of financial products and services designed and delivered to help the poor improve their standard of living.
In this research, empowerment is viewed in three dimensions: choice, use, and voice. These are explored through actual experiences of low-income groups and individuals in relation to their use or non-use of financial products and services, including digital financial services (DFS). The specific issues in-relation to these are detailed in a Field Guide. . These three dimensions may be reflected in the following capacities and actions.
Two qualitative research tools were used: focus group discussion (FGD) and individual interviews. Nine FGDs involving 51 financial customers and 15 individual interviews (of which 12 were unique interviewees who did not participate in the FGDs) were conducted in Metro Manila (Quezon City) and its neighboring provinces of Rizal (Rodriguez Town) and Bulacan (Bocaue, Bustos and Pandi Towns). The sample included low-income financial customers reached include rural and urban women, microentrepreneurs, farmers, informal settlers, employees, driver-operators, and those with family members who are overseas Filipino workers (OFWs).
Two FSPs chose the FGD participants from among their active customers. While guided by the customer profiles pertinent to the research project, the FSPs primarily adopted a semi-random selection method based on the date of the field research (e.g., invite customers scheduled to attend the regular center meetings associated with microfinance transactions). Alay Buhay Foundation was the FSP research host; it provided the urban-based customers. Alalay sa Kaunlaran, Inc. (ASKI) provided the rural-based customers.
It is important to note that, because microfinance providers selected the customersmost customers interviewed were microfinance loan customers. Microfinance has achieved significant scale, with 186 banks serving over 1 million customers (out of an adult population of 68 million), according to Central Bank of the Philippines. In urban and peri-urban areas, the market is very competitive with customers having numerous choices among providers. Experience with remittances was prevalent among the sample and reflects the widespread use of remittance services in the Philippines—21 percent of households sending and 34 percent receiving in 2014 (Global Findex 2014). But there were few users of formal banking services and no mobile users. This in part reflects low levels of mobile money and formal banking penetration. While the Philippines has a mobile phone penetration rate of over 100 percent, mobile banking has struggled and reaches only 4 percent of the population. Access to formal banking is similarly low with around 21 percent of people having an account at a formal financial institution and 15 percent having a savings account (Global Findex 2014).