TRANSUNION Philippines saw continued growth in new credit accounts opened by millennials last year on the back of improving finances and technology.
In a statement sent to reporters Wednesday, the credit bureau said 57% of new-to-credit accounts opened as of end-October 2017 were by millennials, up from just 40% in October 2013.
“This is a new trend that has increased over the last four years and has continued to grow in prominence nationwide,” TransUnion added.
New-to-credit (NTC) accounts are banked or unbanked consumers who have no borrowing or payment history from lending facilities such as credit card accounts or personal, automobile, or housing loans.
TransUnion attributed the growing number of millennial borrowers to technology, which enables the younger generation to be informed and avail of financial services.
“Millennials are now at a stage in their professional careers where they have the ability to access services that can help them with their finances,” TransUnion Philippines President Pia Arellano was quoted as saying in the statement.
“The existence of technology that enables them to be aware of such services, coupled with the ease by which they can apply, results in them having more drive in gaining credit and the many benefits it can bring to their economic lives.”
According to Pew Research Center, the millennial generation is born between 1981 and 1996. Currently, millennials have an age from 22-37.
Aside from this, banks and other lenders are becoming more advanced in the way they service NTCs as they are inclined to use scoring and services provided by credit bureaus to assess the creditworthiness of potential clients.
Historically, younger clients have been ignored or had a hard time accessing funds from lenders given that they have no previous record of creditworthiness.
“These advancements are good news because they further drive financial inclusion across the Philippines and is indicative of a growing generation of consumers that has the need for such products and services,” Ms. Arellano added, noting that this puts the economy in a good position as it propels exchange of goods and service.
TransUnion Philippines is an information solutions firm that collates credit information and provides analyses to its clients.
It is one of the credit bureaus accredited by the Credit Information Corp., the state credit registry, alongside CIBI Information, Inc., Compuscan and CRIF S.p.A. — KANV