In the Philippines' pursuit of financial inclusion, access to fair lending is an essential pillar that empowers individuals and businesses alike. The country's leading finance super app and largest cashless ecosystem GCash, through its lending arm Fuse, is driving economic empowerment by putting accessible and affordable credit in the hands of millions of Filipinos.
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Fuse Lending opens doors to digital lending for unbanked communities, MSMEs
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It was in 2016 when GCash's parent company Mynt launched Fuse Lending to better serve underbanked Filipinos. Six years later in 2022, Fuse launched GLoan, a pioneering lending product that provides them with their first access to credit, without the need for credit history or collateral.
Fuse has expanded to include services beyond GLoan, such as GCredit (revolving credit line), GGives (installment loan for partner merchants), GLoan Sakto (nano-loans), and Borrow Load. With loans as low as Php100, GCash has disbursed more than PHP 155 billion worth of loans to over 5.4 million Filipinos, including those in the grassroots sector, namely, sari-sari store owners, public market vendors, and farmers.
Meanwhile, 68% of GLoan borrowers are women, while one out of three are micro, small, and medium enterprises (MSMEs).
GCash opened the door to digital lending for many Filipinos who borrow money from informal sources – 86% of GLoan users are first-time formal borrowers.
“We saw GLoan as a lifeline for millions of Filipinos to get by in the aftermath of the pandemic, where there was the increased need for easier access to credit," said Fuse Lending president and CEO Tony Isidro. "We pulled many individuals and businesses from the dark, and fast forward to today, the enterprises we've helped are thriving, while the individuals have been able to bounce back. That is the transformative power of digital finance—to harness technology for good.”
Supporting the national strategy for financial inclusion
The progress that GCash and Fuse have enabled aligns with the Bangko Sentral ng Pilipinas' National Strategy for Financial Inclusion 2022-2028. The BSP is targeting a 10% percentage share of MSME and agricultural loans by 2028. Data from the Philippine Guarantee Corporation in 2021 shows that the percentage share for the two sectors, which drive the country's economic growth, are at 1% separately. GLoan’s entry also came at a time when the total percentage of their total loan portfolios had been declining.
The BSP cited data that shows some reasons that hinder Filipinos from accessing credit, including lack of money to open bank accounts (45%), documentary requirements (26%), and proximity to financial institutions (8%), while others (31%) also report being intimidated by traditional bank processes.
Despite their successes, GCash and Fuse are constantly innovating on ways to reach more Filipinos who remain in the “credit vacuum,” in view of the goal of Finance For All.
Reaching more Filipinos through Fuse's business partnerships
GCash and Fuse have expanded their lending services through recent business partnerships with various organizations such as Lazada (seller loans), and Mayani and Farm Konekt (farmer loans).
Through its partnership with Lazada, GCash is supporting online sellers, providing them with digital loans that accelerate their business growth. Fuse has integrated its seller loan product within the Lazada Philippines Seller Center app, giving the lending company access to MSMEs beyond the GCash platform.
Meanwhile, the partnership with Mayani and Farm Konekt provides farmers and fisherfolk not just with non-collateral loans and access to other GCash services, but also sessions on financial literacy and digital finance. This is in line with GCash's vision of financial inclusion, empowering the agricultural sector through technology and access to credit that helps them withstand challenges such as calamities and weather disturbances.
Innovating to address various needs
GCash is also rolling out Borrow Load and Borrow on the Spot, which will be useful for prepaid subscribers who might need access to load or data during emergencies while on a budget.
“GCash and Fuse have always built their relationship with their customers around trust," Isidro said. "That also means being able to tell Filipinos that we trust them with these loans, which they might need for varying circumstances. It has been our vision since Day One, and we're glad that our users have also placed their trust in us.”
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