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Gokongweis embark on ‘fintech’ venture

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Gokongweis embark on ‘fintech’ venture

/ 05:14 AM August 03, 2017

A unit of conglomerate JG Summit Holdings Inc. has set up a financial technology (fintech) venture that offers a digital credit marketplace for Filipinos with immediate funding needs, including payments for tuition, unexpected medical expenses or even small business financing.

JG Summit’s subsidiary Express Holdings Inc. has inked an exclusive partnership with Greater China-based Oriente to create a peer-to-peer lending solution for “underbanked” consumers and micro, small and medium enterprises (MSMEs) in the Philippines.

The joint venture is in the pre-operating and developmental stage, the parties announced in a joint press statement. The platform is expected to be launched in early 2018.

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“Leveraging its experience building internet giants LU.com and Skype, Oriente is using technology and data science to tap into JG Summit’s resources to enable online peer-to-peer lending and wealth management at attractive interest rates,” said JG Summit president Lance Gokongwei.

Under this peer-to-peer set-up, a lender will be matched with individuals or businesses in need of financing using a digital marketplace, thus bypassing traditional financial intermediaries like banks.

Hubert Tai, chief executive officer of Oriente and co-founder of LU.com, said: “We are creating a digital infrastructure and social ecosystem to fuel financial inclusion, enabling credit and wealth accumulation.” Globally, LU.com is one of the highest valued fintech startups at $18.5 billion and boasts an active customer base exceeding seven million and annual transaction volume of $800 billion.

Geoffrey Prentice, co-founder of Oriente and Skype, added Oriente would address a pressing social need by providing a “superior” option to informal lending. “Skype empowered affordable communications. In a similar manner, our partnership will empower Filipinos to access affordable credit by leveraging the latest technology.”

Skype is one of the largest technology startups in Europe to date, and now makes up 40 percent of all international voice traffic.

Oriente was founded in April 2016 to address a multitrillion-dollar problem in emerging markets—the lack of affordable credit, even for the salaried middle class.

Citing data from the World Bank, the firms said close to 90 percent of adult Filipinos are not covered by a credit bureau and many people resort to informal means to borrow money. The Bangko Sentral ng Pilipinas has also reported that of the 43 percent of the population who save money, only 14 percent of households maintain a deposit account while 68 percent keep their savings in unsecured places.

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TAGS: Express Holdings Inc., financial technology (fintech), funding needs, JG Summit Holdings Inc.
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