Daven Tamayo

GCash says lending unit's bad loan ratio lower than digital banks'

Article (news)

Arthur Fuentes

ABS-CBN News

MANILA -- GCash has a lower rate of non-performing loans or bad debts compared to digital banks, an official of the fintech giant said on Thursday.During a briefing with reporters in Makati, Anthony Isidro, the CEO of Fuse, GCash&#x27;s lending unit, said the company has a better repayment record for loans than some digital banks.&quot;I cannot disclose [the NPL ratio]. But at least from what we know and at least from what we see in public on what the digital banks declare, I&#x27;m quite confident we&#x27;re lower than the digital banks,&quot; Isidro said.The Bangko Sentral ng Pilipinas has said that some digital banks are still struggling with lending--with NPL ratios that were much higher than traditional banks. The BSP has also said that several digital banks have yet to turn a profit.Isidro said GCash was able to keep bad loans down by using artificial intelligence in its credit scoring system called GScore.&quot;So, it&#x27;s based on basically the customer&#x27;s footprint in the G-Cash ecosystem. So, with that, by using A.I., we&#x27;re able to develop our own proprietary credit score,&quot; he added.GCash expanded its lending portfolio to cater to lower income users last year with its <a href="https://www.abs-cbn.com/business/08/30/23/gcash-partner-offer-pantawid-sakto-loans-as-low-as-p100" rel="noopener noreferrer" target="_blank">Sakto loans </a>where users can borrow as little as P100 for urgent needs.  &quot;As long as they&#x27;re eligible based on G-Score, then literally in less than a minute, they just click on the app and they get all the instantaneously,&quot; Isidro said.<div><img src="https://od2-image-api.abs-cbn.com/prod/editorImage/1741850018406gcash renren.jpg" class="fr-fic fr-dib" style="width:960px"/>GCash operator G-Xchange Inc President and CEO Oscar Enrico &quot;Ren-ren&quot; Reyes briefs reporters on the plans of the fintech giant. Arthur Fuentes, ABS-CBN News</div>While sometimes seen as high-risk, Isidro said loans from lower income users actually had a high repayment rate. He said this showed that poor people valued their GCash accounts and how it affords them access to financial services.&quot;People who belong to the lower income classes, that&#x27;s really the market we want to serve.And what we&#x27;re seeing is that almost 70 if not 80% of our customers in Fuse Lending now actually used to borrow from informal lending.&quot;Users from lower income groups value having access to formal lending services, he said, as informal lenders, referred to as five-six, charge usurious rates.&quot;So now that we&#x27;re able to give them this access to fair lending, what we&#x27;re seeing is they&#x27;re very protective of it and they really take care of it,&quot; Isidro said.GCash operator G-XChange CEO Oscar Enrico Reyes said the company&#x27;s credit scoring system has already helped it dispense $3.2 billion dollars (P183 billion) to 7 million Filipinos.Reyes said the company aims to further expand lending this year, with an eye at small and micro enterprises. He noted that they have so far already onboarded 130,000 &quot;micro-interpersonal vendors.&quot;&quot;So as we look ahead to 2025, our focus remains on expanding lending, supporting businesses, and growing internationally also,&quot; Reyes said.GCash&#x27;s valuation doubled to $5 billion last year as Ayala Corp and Japanese finance giant MUFG infused fresh funding into the fintech giant. Parent firm Globe Telecom has said that it is looking to list Mynt, the holding firm for GCash, in the Philippine Stock Exchange but wants a lower float level than is required by regulators.<div><iframe width="640" height="360" src="https://www.youtube.com/embed/9jNBHNhpo0M?&amp;t=8s&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe> </div>

GCash has a lower rate of non-performing loans or bad debts compared to digital banks, an official of the fintech giant said on Thursday.

GCash has a lower rate of non-performing loans or bad debts compared to digital banks, an official of the fintech giant said on Thursday.