Fintech’s features to woo SME
The head of UBX Corporation, which launched it digital banking system in the country, has expressed confidence that Filipinos, particularly owners of small and medium enterprises (SME), would eventually integrate financial technology (fintech)into their businesses.
In an exclusive interview with The Daily Tribune, UBX president and CEO John Januszczak said his company is targeting SME that account for 99.6 percent of all businesses in the Philippines.
“They represent 60 percent of the GDP (gross domestic product) yet well under 10 percent of loans extended by commercial banks go to SME. So clearly the numbers speak for themselves, there is a clear need for credit for such an important segment of our economy,” he said.
Januszczak said he thinks Filipino entrepreneurs will quickly adapt to fintech even if the majority of its target market has never set foot in a bank, much less hear of fintech or digital banking.
“As much as UBX is a fintech company, it is 100 percent owned by UnionBank which I think is important. Because one thing that banks have is an element of trust, and I think people, knowing that our platform is at the end of the day run by a company that is owned by a bank, I think will provide a degree of assurance and confidence,” he said.
They represent 60 percent of the GDP (gross domestic product) yet well under 10 percent of loans extended by commercial banks go to SME.
Fintech offers financial services using modern technology and software. UBX built its own lending platform and it’s embedded into an online commerce site such as a point of sale system and the ordering system of Fast-Moving Consumer Goods (FMCG) distributors. Thus, even owners of sari-sari stores can apply for a loan at UBX through the FMCG platform.
He admitted however, that UBX has to take a certain number of steps before the public learns how it works and how it could get benefit SME.
“We’re not telling people, ‘Okay, you know, you’re paying cash now, I want you to go fully digital, on immediately.’ (But) cash on delivery for online commerce is very popular, so one thing that we’re going to do is try to help digitize cash on delivery to get to the point where we go digital. We’re not trying to try to go from one to 10 immediately. We’re taking from one, two, three, four… until we get to 10,” he explained.