Venio provides unbanked consumers with nano-credit assistance by making credit facilities accessible through a smartphone app. Users enter their details in the app to apply for a loan and then wait for the app’s decision.
Approved nano-sized loans—typically between US$1 and US$5 or the market currency equivalent—can be used “same as cash” within the Venio Marketplace to purchase goods and services such as food, communication, transportation, and medicine from partner merchants.
Included in its retail network are a growing number of Philippine sari-sari stores as well as international retailers such as Grab and McDonald’s.
“We focus on these small ‘nano’ sized loans as it is a unique offering and other players are not offering credit facilities of this size,” said founder and CEO Warren Platt. “The fact that Venio is offering loans of these sizes means that we can reach customers no one else is and people that have been excluded by the financial system.”
Of the nearly 400 million adults in Southeast Asia, 198 million remain unbanked and do not own a bank account. In the Philippines, the number stands at 44 million, according to a 2019 report by Google, Temasek, and Bain & Co. Nikkei Asia also reported that in the Philippines, 52 million people, or nearly 80% of adults, are ineligible for bank loans. Many end up borrowing money from acquaintances or loan sharks to cover unforeseen expenses.
Venio’s mobile application is designed to encourage responsible lending and borrowing as well as allow customers to build their own credit history. Loans are available without any upfront collateral provided on the part of the customer. Each transaction is charged with a 15% convenience fee.
A proprietary scoring algorithm takes over 60 data points from the user’s handset, details on the user’s profile, and further user application data. According to Venio:
• “Geolocation data showing the person goes to the same place five days a week for eight hours would suggest they have a job;
• A download in English could suggest higher education and so earnings potential (the app can be accessed in either English or Filipino);
• Educated users are likely to store contacts with capital letters at the start of their names; and
• Customers having a lot of contacts with post-paid phone numbers would suggest they move in a relatively better-off circle.”
“When done responsibly, nano-credit can really work for people,” said Mr. Platt, who added that initial repayments and secondary loan repayments continue to be greater than expected.
Venio, which means “come” in Latin, has expanded its services nationwide across the Philippines on the back of launches across Manila, Cebu, and Davao. It has also launched operations in Mexico on the back of an oversubscribed debut in the Philippines. — Patricia B. Mirasol