NON-BANK FIRM Home Credit Philippines has secured a license from the Bangko Sentral ng Pilipinas (BSP) to offer credit cards to its clients, the first after a new law was passed opening the industry to new players.
The BSP made the announcement through Circular Letter 2019-008 issued on Friday, as signed by Sector-in-Charge Restituto C. Cruz of the Financial Supervision Sector.
The Monetary Board (MB) initially approved the license to operate as a credit issuer to HC Consumer Finance Philippines, Inc. (HCPH) last Oct. 25, while the corresponding certificate of authority was issued Nov. 21.
Based in Prague, Czech Republic before venturing to Manila, Home Credit offers in-store financing services for gadgets, appliances, and similar goods to unbanked customer and even to first-time borrowers.
“HCPH is the first stand-alone non-bank financial institution to apply for a credit card license acted upon by the MB pursuant to Republic Act (RA) No. 10870, otherwise known as An Act Regulating the Philippine Credit Card Industry…,” according to the BSP issuance.
Former President Benigno S.C. Aquino III signed the credit card industry law on July 27, 2015, which officially places credit card issuers under the central bank’s watch. The measure likewise opened the sector to new players.
Implementing rules drafted by the BSP last year sought to instill consumer protection protocols like the disclosure on the amount and the computation of fees and charges, safeguards against unfair collection practices, immediate posting of payments, confidentiality of consumer data, and the expeditious resolution of complaints.
Outstanding credit card loans reached P264.632 billion, up 22.2% year-on-year as of September 2018. Of this, problem debts stood at 5.4% of the total, lower than the 5.83% share a year ago.
In a previous interview, Home Credit said it is looking to expand its customer base by 70% this year by bringing more borrowers through online channels. The consumer finance firm expects a surge in new borrowers via their mobile app for gadget financing and pure cash loans.
The firm pledges loan approvals for in-store applications in less than 10 minutes, with fewer requirements compared to bank loan applicants.
Home Credit started with a client base of 100,000 in 2015. The figure has grown to 3.64 million as of Nov. 23, according to latest available data. Meanwhile, loan collectibles stood at P24.2 billion as of mid-December. — Melissa Luz T. Lopez