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Cashalo on ‘hyper-growth’ mode

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By Karl Angelo N. Vidal, Reporter

MOBILE LENDING platform Cashalo aims to have a million clients by the first half of 2019 as it leverages on technology to reach unbanked and underserved Filipinos.

Cashalo General Manager Hamilton Angluben expects the platform to serve a million clients as it eyes to serve those who do not have access to formal lending services.

“We’ll have to see if we can achieve that this year, but definitely by the first half of next year, we will achieve that goal,” Mr. Angluben told BusinessWorld on Friday.

Cashalo is a joint venture between Gokongwei-controlled JG Summit Holdings and Hong Kong-based financial technology firm Oriente, investing P10 billion to develop and expand the brand.

Launched in May, Cashalo lends money between P1,500 and P10,000 through its mobile application, allowing customers to borrow more if they meet their loan obligations. Interest rates start at 3.95%. Application is done online, requiring clients to submit documents and IDs digitally. Cashalo also uses facial recognition and accesses data stored in smartphones — with the borrower’s consent — to assess the creditworthiness and legitimacy of its customers.




Loans can be disbursed within the day and will be received through bank accounts.

During its initial run, Cashalo intended to offer digital lending services to the unbanked, or Filipinos who have savings account but still do not access other financial services.

“Our initial target was the underserved. We started there, then we went to the unbanked,” Mr. Angluben added.

Cashalo started tapping the unbanked by launching the “Cashacart” consumer purchase loan, allowing customers purchase multiple items from the platform’s merchant partners.

Cashacart started offering loans in August to as much as P20,000 payable up to nine months in Robinsons Appliances and Robinsons Department Store.

Mr. Angluben added that Cashalo is in a “hyper-growth mode” as it plans to increase its presence ahead of the holiday season to up to 250 from the current 150 merchants.

Amid its rapid expansion plans, Mr. Angluben said internet penetration as well as the inability of Filipinos to open a bank account continue to be hurdles for the mobile platform.

“Without any financial history, banks and financial institutions will not give them services,” he said.

The latest 2017 Financial Inclusion Survey by the central bank revealed that only 22.6% or some 15.8 million Filipino adults maintained a formal accounts as of last year, citing lack of money and lack of need as the main reasons.

“So our first goal is give them a credit score to get them started,” he said. “We’re being prudent to make sure that we’re constantly improving our credit model to eventually be able to service the unbanked,” Mr. Angluben added.

The bulk of Cashalo’s customers are in Metro Manila, while the rest are in key cities in Luzon and Visayas. However, Cashalo’s penetration in rural areas remain slow as the gap between financial services and smartphone penetration is still wide.

“In the rural ares, not so much. That’s where the internet penetration comes in as well as the financial savviness of the people,” Mr. Angluben said. “There’s a huge disconnection between financial services and technology. That’s what we’re trying to close — leveraging on technology to close the gap.”

Mr. Angluben added that once rural banks gain accreditation to automated clearing houses such as PESONet and InstaPay, Cashalo can penetrate the areas being served by rural lenders.

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