Bitcoin as a symptom
As it rose to popularity, many experts predicted that it would become the go-to solution for remittances, especially in Southeast Asian markets like the Philippines, which have high overseas working populations.
Bitcoin – the pundits suggested – would allow overseas Filipinos to send their remittances more affordably than traditional wire transfer services like Western Union. Even companies that traded Bitcoin, such as Coins.ph and Satoshi Citadel Industries, communicated the expectation that remittances would be a major use case.
Several years later, Bitcoin has indeed taken off in a big way in the Philippines and other neighbouring ASEAN markets, but not for the reason most anticipated. The money corridors of giants like Western Union have largely remained unscathed. Instead of sending remittances via Bitcoin, Filipinos have taken to the cryptocurrency as a form of investment, trying to profit off as a speculative tool.
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What should be interesting to note is that such Filipinos are not necessarily interested in Bitcoin itself – they hold no ideological affinity for the decentralization of money, or other similar ideals usually associated with the earliest adopters of the coin. These Filipinos simply lacked access to investment instruments, and Bitcoin – by its sheer ubiquity in tech and business media – happened to be the easiest to invest in. If the financial exclusion is a problem, so, too, is investment exclusion: People have no channels to make their money grow.
That’s why the rise of digital investment channels is so important for a country like the Philippines. The fin-techs who provide mobile wallets, including PayMaya, GCash, Coins.ph, and Rebit, now count millions of users between them. Now that Filipinos have the means to store value, they also need to be given channels to increase this value. On this front, there are many promising local and global companies accomplishing just this task.
Next-generation investment platforms
The local startups in the Philippines addressing the need for more investment channels are as much impact- as profit-oriented. And within the broad impact of helping people in need of money, people can further segment by their own particular interests.
If you’re passionate about helping students, you can extend a loan to students via InvestED. This loan will help with a variety of academic-related expenses, such as their tuition, dorm fees, daily allowances, or school needs like their laptop. In return, you as a peer lender get 6 to 12% per annum on their investment.
If you care more about rural communities, on the other hand, you can invest in a platform like Cropital. The platform connects peer lenders with farmers, who use the capital to scale up or modernize their farms in some way. There then becomes three way value creation: the crops grow, the farm’s business grows, and the investor’s investment grows.
Founded in Israel, global social trading platform eToro has become very popular in Southeast Asia, the Philippines included. The company has pioneered copy trading, which makes it easier for new or busy investors to invest in the stock markets by allowing them to automatically copy the future trades of a trader who matches their risk appetite and other preferences.
eToro also notably has numerous CopyPortfolios that allow investors to copy thematic portfolios, one of which is a 5G portfolio that gathers 45 companies integral to the global rollout of 5G mobile network.
These include tech manufacturers like Intel and Hewlett-Packard as well as telcos like AT&T, Telenor, and China Telecom, which launched the third telco in the Philippines with Mislatel Corp. Filipinos, in short, will be able to invest in the companies indirectly and directly responsible for one day deploying 5G where they live and work.
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That InvestED, Cropital, and eToro allows Filipinos to invest in the development of their own communities – be it through human capital or technology infrastructure – should be noteworthy for every founder in Southeast Asia.
One, Filipinos want access to financial instruments that allow them to grow their money, in a way that makes sense for them. People don’t want to be pigeon-holed into investing in whatever financial trend is currently dominating the headlines, but have genuine options available to them, each of which they can carefully consider through transparent terms.
Furthermore, given the choice between investing in an abstract commodity and one that has a direct impact on their community, Filipinos will almost always pick the latter. It’s an easy choice. Why just earn money when you can do so while also helping your less fortunate neighbours or building your community’s tech infrastructure?
Founders across the Asia Pacific need to think of ways they can similarly create value for multiple stakeholders, spread across people or organizations in need of capital and those who have it to lend or invest. If they achieve this goal, founders will have something even more valuable than the oft-cited platform or marketplace that they say they want – they’ll have genuine community.
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Image Credit: André François McKenzie
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