MERCHANT PAYMENTS solutions provider PayMongo Philippines, Inc. has partnered with GoTyme Bank to launch PayMongo Capital, a loan product for micro, small, and medium enterprises (MSMES).

PayMongo Capital is digital lender GoTyme’s first loan product.

“Going into loans is a big step for GoTyme Bank and we are optimistic that with the partnership with PayMongo, we will be able to give SMEs the best customer service and peace of mind,” GoTyme Co-and Chief Executive Officer (CEO) and Chief Commercial Officer Albert Raymund O. Tinio said in a statement on Thursday.

PayMongo Capital can be a starting point for smaller businesses that have no ready access to formal credit, he added.

“You start off with PayMongo, creating data that become the proxy for your credibility to borrow and pay back. When you pay back in a timely member, you’ll be eligible for more. It’s not a ‘one-time, big time.’ It’s about creating a long relationship that will help the merchant grow their business in a sustainable manner,” Mr. Tinio said during the product launch on Thursday.

PayMongo Capital was launched to address the credit gap among MSMEs, former GoTyme CEO and Co-Founder and current PayMongo President and CEO Elmer “Jojo” M. Malolos said.

Eligible PayMongo users will be offered a loan with a specific amount, tenor, and rate, depending on their transaction history. They can be offered loans of up to P500,000.

Customers can receive the funds within one business day in their registered bank account. The loan will be repaid through automatic deductions from their daily sales.

“The repayment process is basically based on the sales cycle of the merchant. If the merchant does well, they repay the loan faster. If the merchant has a slow season, it’ll take longer to repay the loan,” GoTyme Bank Chief Strategy and Proposition Officer Aaron Foo said.

Merchants only need to pay an additional flat fee for the loan. PayMongo Capital has no processing fees, penalty fees, or interest.

The flat fee can range from 1.25% to more than 2% on average, Mr. Foo said.

“In terms of the fee structure, it’s basically just one flat fee that is applied to the entire loan amount. It’s hard to give a specific account because it will be based on the merchant’s specific profile. We’re applying a very data-driven, risk-based process,” he said.

PayMongo Capital also features a flexible pay schedule based on a merchant’s daily sales.

GoTyme President and CEO Nathaniel D. Clarke noted that only about 10% of PayMongo’s total customer base can currently be offered a loan, but they could expand to more users in about three to six months, depending on the product’s performance.

“The biggest factor in being eligible is how deeply they’ve adopted PayMongo. How long have you been with PayMongo, and how many transactions have you accepted through PayMongo,” he said. — A.M.C. Sy

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