FINTQnologies Corp. (FINTQ) is set to launch a digital credit scoring system help lending institutions assess the creditworthiness of their clients.
In an interview, FINTQ managing director Angelito M. Villanueva said the financial technology arm of PLDT Group’s Voyager Innovations, Inc. will be introducing a digital credit scoring tool in its digital lending platform Lendr in October.
“This is an innovation that would enable the unbanked Filipinos to know their own credit score,” Mr. Villanueva told BusinessWorld on the sidelines of the Chamber of Thrift Banks general meeting in Makati City.
He added that the scoring tool will also guide lending institutions in assessing the risk in granting loans to individuals.
Although FINTQ has partnered with credit bureau TransUnion, Mr. Villanueva said the new credit scoring system will be an “alternative” from the usual tools provided by credit bureaus.
“In our case, this is a digital credit score. We’re practically using alternative data sets.”
Mr. Villanueva said FINTQ will source credit data from telecommunication firms as well as bills payment outlets such as Bayad Center to analyze the payment behaviors of clients who wish to borrow funds.
FINTQ plans to onboard an initial five million Filipinos to the credit scoring system which will enable people to access formal lending services.
“This is another tool that will enable Filipinos to have greater access to finance that is affordable, easy and quick in terms of availing of the services,” he added.
According to the central bank’s latest Financial Inclusion Survey, loans from formal sources declined as of 2017 as over a third of the 1,200 adults surveyed said it was “difficult” to borrow from financial firms.
More than half cited documentary requirements as the major hurdle in applying for a loan.
Still, a significant number of Filipinos also shunned informal lenders, with those tapping these channels down to 40% from 72%.
“Practically all stakeholders [will benefit from this digital credit scoring]. Both the banks and lending institutions as well as the Filipinos who will be spared from getting services from loan sharks,” Mr. Villanueva said.
Voyager Innovation is PLDT, Inc.’s digital innovations unit. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — Karl Angelo N. Vidal