Business World

Tycoon seeks to free millions of Filipinos from loan sharks


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, 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.
USERS of Cashalo can apply for loans online.

Newspapers in English

Newspapers from Philippines