Ty­coon seeks to free mil­lions of Filipinos from loan sharks

Business World - - CORPORATE NEWS -

BIL­LION­AIRE John Gokong­wei, owner of the Philip­pines’ largest snack maker and bud­get air­line, and a Skype, Inc. founder will in­vest as much as $200 mil­lion over three years to lend to mil­lions of un­banked Filipinos.

The ven­ture, set up last year by Gokong­wei’s JG Sum­mit Hold­ings, Inc. and fi­nan­cial-tech­nol­ogy start-up Ori­ente, seeks to give credit through a dig­i­tal plat­form to Filipinos who of­ten re­sort to loan sharks be­cause they lack ac­cess to for­mal bank­ing ser­vices. Its ex­pan­sion comes as the cen­tral bank en­cour­ages emerg­ing tech­nolo­gies to spur fi­nan­cial in­clu­sion in a coun­try where more than 70% of adults have no bank ac­counts.

“The big pic­ture here is how do we lib­er­ate and en­able un­der­served Filipinos to have ac­cess to funds,” JG Sum­mit Pres­i­dent Lance Gokong­wei, son of John, said in an in­ter­view in Manila on Wed­nes­day.

The plat­form with Ori­ente, which was es­tab­lished by a co­founder of Skype and Chi­nese fi­nan­cial- tech­nol­ogy start- up LU.com, ri­vals a ven­ture of Sin­ga­pore Telecom­mu­ni­ca­tions Ltd.-led Globe Tele­com, Inc. and Jack Ma’s Ant Fi­nan­cial as well as Mani­l­abased PLDT, Inc., which is in talks with a pos­si­ble for­eign part­ner.

The ven­ture is hir­ing 1,000 peo­ple this year mostly to han­dle ver­i­fi­ca­tion, loan pro­cess­ing and col­lec­tion for a tar­geted half a mil­lion bor­row­ers by the end of 2018, said Hamil­ton Angluben, gen­eral man­ager of the plat­form, which is called Cashalo.

There are only 41.5 mil­lion de­posit ac­counts in the Philip­pines, even though there are more mo­bile phones than the 110 mil­lion pop­u­la­tion, and al­most 50 mil­lion peo­ple use Face­book in the coun­try.

“The tech­no­log­i­cal savvi­ness of Filipinos is off the charts,” said Ge­of­frey Pren­tice, Ori­ente co­founder and chief strat­egy of­fi­cer. The ser­vice will also be at­trac­tive be­cause so few peo­ple have credit cards, he added.

Bank branches aren’t avail­able in a third of towns and cities in the Philip­pines, while pawn­bro­kers and mi­cro­fi­nance providers have a wider pres­ence, ac­cord­ing to cen­tral bank data.

Cashalo users can ap­ply for loans en­tirely on­line and those with­out bank ac­counts can re­ceive the money in des­ig­nated con­ve­nience stores, pawn­shops, and bill pay­ment cen­ters within 24 hours. The ser­vice al­lows cus­tomers to bor­row as much as P5,000 ($ 95) for up to 45 days at 2.95% plus a 4% pro­cess­ing fee. That com­pares with the 20% monthly in­ter­est charged by many loan sharks. — Bloomberg

USERS of Cashalo can ap­ply for loans on­line.

Newspapers in English

Newspapers from Philippines

© PressReader. All rights reserved.