By Melissa Luz T. Lopez, Senior Reporter

A NEW financial technology (fintech) player is looking to capture a million Filipino borrowers via their digital platform, banking on both online merchants and buyers to drive loan volumes.

First Digital Finance Corp. (FDFC) is targeting one million customers in the next two years, which will come roughly five years after they set up operations in the country.

Georg Steiger, co-founder and chief executive officer of First Digital, said their strategy is to fulfill “unmet credit needs”here.

Mr. Steiger put up FDFC in Manila in 2015, together with two former colleagues from global financial consulting firm McKinsey & Co. The fintech firm’s primary business are instant loans tailored for overseas Filipino workers called Balikbayad, which offers an all-online application process approved in one to two days.

Now, the firm is looking to grow their newer BillEase service that allows e-commerce purchases to be paid in installments. FDFC is currently drawing traffic from the online marketplace Lazada, where they are also reaching out to small and medium enterprises (SMEs) and online sellers for credit lines.

“These are people who don’t really have the track record that banks might look for. Crucially, they don’t have the collateral,” Mr. Steiger said. “By focusing more on cash flows and the development of the business, we can be more flexible and we can grow with the business of our customers.”

Mr. Steiger said there remains a “sizeable” market in the Philippines for their firm and its competitors to capture.

“There’s quite a few (fintech loan) players — that’s true, but the market is still quite big. There’s a lot of unserved and underserved needs in the market, and there is space for competition,” he said.

Among the more popular BillEase loans are for cellphone and home appliance purchases, while traders and online sellers stand as their biggest customers in the SME lending space.

Loans for SMEs range from P100,000 to as much as P10 million, with a maximum loan term of six months. Unlike banks, FDFC tracks the firm’s cash flows, sales performance and purchase orders as basis for approving loans as they expect credit needs to grow with the business.

To be competitive, Mr. Steiger said FDFC’s interest rates hover around three percent per month. This prices in the higher risks borne out of these relaxed loan requirements, Mr. Steiger said, but is still close to what credit card providers are offering.

Quoted lending rates charged by commercial banks average from a low of 5.7978% to 8.4883% per annum. Meanwhile, other instant cash loan providers charge as much as 2.5% per day, or 75% monthly.

The company executive said there gaps in credit data as well as the lack of a national ID system remain as barriers for access to financing in the Philippines.

For their part, First Digital is looking to fully automate online sign-ups for cash loans “over the next few months” to fast-track applications filed online.

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