Online lenders target to bring more Filipinos into formal financial sector
ONLINE LENDING companies target to onboard 300,000 additional borrowers monthly next year as the sector wants to help in bringing more Filipinos into the formal financial sector, an industry group said.
Consumer Lending Association of the Philippines, Inc. (CLAP) President and Tala Financing Philippines Inc. External Affairs Director Arianne Ferrer said their member companies want to help reach those individuals that do not have access to financial products and services.
“If there is regulatory stability, consistency, and in general, the amount of support we’re currently getting from the government, we are hoping to reach as much as 300,000 new borrowers every month,” Ms. Ferrer said during a media roundtable on Thursday.
“We would always really give the opportunity to people who do not have financial credit history, who may not have lots of documentation, to have their first financial account.”
CLAP members include some of the biggest online lending platforms in the country that are registered with the Securities and Exchange Commission (SEC).
Ms. Ferrer said CLAP members’ apps have a combined 33 million downloads on Google Play Store and 10 million in Apple Store and Huawei AppGallery.
“CLAP and its members work to break barriers and create new economic opportunities for Filipinos, such as sari-sari store owners and first-time borrowers, by using alternative data and technology to assess credit risk for those with limited or no formal credit history,” the group said in a separate statement on Thursday. “They aim to ensure continued access to credit for the underserved and the unbanked safely and securely.”
The group said it will roll out a nationwide campaign against unethical debt collection practices and predatory lending next year, urging consumers to report these incidents directly to the association.
The SEC earlier said that they received 5,415 complaints of unjust collection practices from online lenders.
“Filipinos deserve protection from abusive practices and affordable access to fair, formal credit,” CLAP said. “With the media as an active partner in consumer education, borrowers can be guided toward safe, sustainable financial choices, and industry efforts to curb fraud can reach the communities that need them most.”
The Bangko Sentral ng Pilipinas (BSP) is targeting to onboard at least 70% of adult Filipinos into the formal financial system. The share of Filipinos with bank accounts reached 65% of the adult population in 2022, BSP data showed. — Katherine K. Chan
