Financial technology solutions such as GCredit, which allows users to avail themselves of loans backed by a digital trust score, will help stamp out the practice of predatory lending.
In a statement, Mynt (Globe Fintech Innovations Inc.) said the borrowing feature via the GCash mobile wallet “aims to end the dependence of Filipinos on loan sharks.”
This is the practice where cash-strapped individuals borrow from professional lenders at high interest rates. GCash charges 3 percent interest per month for the loan.
“They call it a 5-6 lender, and they will borrow to make ends meet for the next month. Usually for you to borrow there, you will need 20 percent interest to pay back. That’s why it’s called 5-6: you borrow five today and pay six the next day,” said Christopher Manguera, chief marketing officer at Mynt.
GCash, a payment and financial services mobile phone application, is used by over 20 million Filipinos. In 2018, it introduced GCredit, the first fully mobile, QR-based credit line available in the Philippines.
As of June, GCredit extended P1 billion in credit to consumers through 250,000 credit lines.
“Finance for all. At the end of the day, what we want is access for people that don’t necessarily have easy access or means to have access to financial services,” Manguera said.
Mynt is owned by Globe Telecom, Ayala Corp. and Chinese billionaire Jack Ma’s Ant Financial.
GCredit is a feature in the GCash app that allows users to pay bills or buy goods from partner merchants. —MIGUEL R. CAMUS