PERA AGAD OFFERS LOANS THROUGH TEXT
Cash Credit partners with Smart Communications to offer loans to its 60 million subscribers through short messaging service.
With a large number of Filipinos still unbanked, a foreign fintech and lending company partnered with a local telco to offer unsecured loans to over 60 million subscribers.
Cash Credit, which operates in Bulgaria, South Africa, and Cameroon, launched on Thursday Pera Agad, a cash loan service one can avail of through SMS.
First launched in Metro Manila in June last year, Pera Agad allows Smart and Talk N’ Text (TNT) prepaid subscribers to avail of a loan up to P10,000 at an interest rate of 2.5 percent per week.
The results of the Metro Manila operations in less than a year allowed Cash Credit to provide loans to 2,000 subscribers with loan ticket sizes of P4,500 on average, with 80 percent of them are repeat borrowers.
According to FINTQ by PLDT managing director Lito Villanueva, this partnership will allow the telco to push for financial inclusion in the country by having the telco as a channel for people to avail of loans, and provide financing alternatives to those who borrow from loan sharks, who impose at least 20 percent monthly interest or higher daily.
“Pera Agad loans will benefit micro enterprises and individuals who need cash fast. Applying is done digitally and loans are granted within minutes,” said Diana Krumova, Cash Credit president and chief commercial officer.
However, Cash Credit requires applicants to be Smart and TNT prepaid subscribers for at least six months, since the lending company will base the creditworthiness of the borrower based on his prepaid load consumption.
“Cash Credit analyzes and develops a machine learning algorithm to assess the creditworthiness of the subscribers based on their history and behavior with their mobile operator,” said Cash Credit, adding that this approach has been successful in other countries where it is present.
Repayment term ranges from four to 36 weeks, and loans can be paid at 7-Eleven, Cebuana Lhuillier, and Bayad Center branches.
To avail of a loan, Smart and TNT subscribers have to text LOAN to 2423. They will receive a text from Pera Agad and they need to key in “OO” as a reply. Loan applicants need to go to authorized Smart Padala Centers and bring one government ID and their SSS number, and fill out an application form. In less than an hour, if approved, they can claim their loan.
Within the year, Villanueva said the service will be made available to Sun subscribers.
Meanwhile, Cash Credit is also in talks with mobile operators in Indonesia and Myanmar to roll out the lending service to these countries in the next few years.