60 Decibels 2023 MFI Index: BillEase improves quality of life of underserved Filipinos

60 Decibels Global Microfinance Index reveals new findings in landmark 2023 report based on 32,000 customer interviews and 1M+ unique data points

(MANILA, Philippines) 6 October 2023 – Microfinance improves borrowers' quality of life, helps to build gender equality, and invests for the future.? These are some of the findings of the 60 Decibels Microfinance Index 2023 published recently.

Based on interviews with over 32,000 microfinance clients in 32 countries, the 2023 index has gathered over 1 million data points.? The survey represents over 84 million microfinance borrowers, equivalent to around 40% of the global total.

According to the report, 66% of BillEase respondents turned to the financial service provider due to a lack of access to good alternatives. Of those that use BillEase to finance a business, 11% said that their business income has very much increased after the loan. 60 Decibels also found that? 83% of BillEase clients agreed that their quality of life has improved, 29% of which said the quality of their lives very much improved. The ability to pay for personal/family expenses was named as the top improvement in their quality of life.??

This second Microfinance Index shines a light on the ways microfinance is helping improve the lives of some of the world’s most marginalized communities.? Key insights from 60 Decibels Global Microfinance Index? include:

1. Clients who have been with their financial service provider (FSP) longer are more likely to ‘strongly agree’ that their lives and household welfare have improved.?

Around 22% of longer-tenured clients reported significant improvement in their spending on home improvements; eating better quality and quantity of meals at home; and increased spending on their childrens’ education. By comparison, 16% of shorter-tenure clients reported similar improvements.?

Longer-tenured clients were also more likely to report improved resilience to financial shocks. Nearly 3 in 10 longer-tenure clients report significant improvement in their ability to face an emergency expense because of their financial service provider, compared to 2 in 10 shorter-tenured clients. The compounded benefits of such associations are evident across various household metrics, and reveal the transformative power of long-term engagement with financial service providers.

1. Clients who access additional services from the FSP beyond their loan report stronger individual, business, and household outcomes.?

Of those surveyed, clients who accessed any services in addition to credit from the FSP in the last six months reported more substantial improvements in quality of life, business income, ability to manage finances, savings, and confidence compared to those who do not.?

At the household level, clients who access both non-financial and financial services in addition to their loan from the FSP are more likely to report very much improved quality of life (53% of those who accessed both vs. 31% who accessed only credit), increased savings balance (36% vs. 16%), ability to manage finance (48% vs. 28%), and confidence in their abilities (53% vs 32%).?

The trend is similar for business-level outcomes – nearly double the amount of clients who access both additional services are more likely to report 'very much increased' income compared to clients who access only credit, saying the same.

These findings support the thesis that offering bundled, or any, additional services beyond credit to clients, has the ability to significantly improve social performance outcomes for clients in quality of life, confidence, savings, and ability to manage finances. Two-thirds of the FSPs in the dataset currently offer both financial and non-financial services to clients in addition to credit.?

“These data set a new standard around how we can understand what social performance means for microfinance institutions and their investors,” said 60 Decibels CEO Sasha Dichter. “By speaking directly to 30,000 clients who represent tens of millions of borrowers, we can see what is working, at scale, and also to point out where accepted wisdom does not align with what customers are telling us about their lives.? By listening better—in a standardized, consistent way—and comparing like-to-like performance of FSPs, we can get better data that helps serve clients, improve products, and, ultimately, improve lives.”?

“We are proud to contribute to the broader understanding of microfinance's impact and to use our findings to continue making a meaningful difference in the lives of our clients. The 60 Decibels Microfinance Index highlights BillEase's significant impact on the lives of low-income Filipinos. These findings reinforce the importance of providing client-centric financial services that prioritize the needs of the underserved segments of society. BillEase's success serves as a shining example of how inclusive finance can uplift communities and drive positive social change,” said? Georg Steiger, CEO and Co-Founder of BillEase.

There are many consistencies with the 2022 60dB including that the majority of women continue to report their households and businesses have improved because of microfinance. Now, there is additional data on the impact financial service providers have on women, individually. 83% of women report improvements in their confidence because of their financial service provider, and 67% report improved financial decision making. The improvements that women report are marginally greater than men.?

Despite the overall positive impact reported by microfinance clients, there are 1 in 4 clients who reported their loan repayments are a burden - with a handful reporting that they are a heavy burden. Loan repayment burden is strongly linked to clients’ worry about finances and their household food consumption - those who say their loan repayments are a burden are more likely to report reducing their household food consumption and say their concern around their finances has increased.??