Most Filipinos saw easy credit in 2023, Digido survey shows

EIGHT of 10 Filipinos thought credit was accessible in 2023 even as borrowings fell, according to a survey by Digido.

Of the 80%, 38% said their access to formal credit improved in 2023 from a year earlier, while it stayed the same for 42%, the consumer finance company said in a statement on Tuesday.

All respondents had either formal or informal credit at the time of the survey, with 57% having at least one outstanding loan from a formal lender. Digido surveyed 1,500 Filipinos nationwide aged 18 and above.

It said 31% of respondents borrowed from nonbank financial institutions with an online component, followed by traditional banks (25%), digital banks (14%) offline nonbank financial institutions (13%) and through the apps or websites of traditional banks (9%).

Digido said 48% borrowed from friends or family members.

Most, or 60% of the respondents, said credit was accessible from formal lenders due to an easy application process, while 50% cited convenient repayment methods and 47% cited high probability of approval.

“Other positive factors include a convenient repayment schedule (43%), application through mobile app (42%) and attractive interest rate (30%),” Digido said.

It said 64% of the respondents said they paid their loans on time, while the remaining 36% said they missed payments.

Filipinos mostly preferred personal loans for formal credit, citing flexibility and the variety of use (54%). This was followed by “buy now, pay later” (12%), credit cards (6%), and business loans (6%).

Digido said borrowings fell in 2023, with only 76% of respondents taking out loans from 85% in 2022. Filipinos who did not apply for formal credit rose to 24% from 15% in 2022.

The survey also showed that 28% of the respondents said their loans increased in 2023, with 41% demanding to raise the borrowing limit.

Digido said 57% of Filipinos intend to apply for loans this year, while 38% said they would only take out a loan if needed. It added that 12% had no plans to borrow this year.

Digido also said 76% were satisfied with their borrowing experience with formal lenders. It said 56% of respondents preferred to apply online, compared with 37% who preferred offline channels.

“Demand for online channels is highest in the National Capital Region and the middle-income group, likely due to the higher standard of living and degree of digitization,” Digido said.

Filipinos demand improved customer experience from formal lenders, with respondents seeking better loan rates (48%), repayment schedules (35%) and more repayment methods (33%). —