Unionbank-Ping An unit goes into online lending

SeekCap, a new online lending platform for the underserved micro, small and medium enterprises (MSMEs) backed by Aboitiz-led Union Bank of the Philippines and Chinese financial conglomerate Ping An, has entered the fintech space.

A partnership between UnionBank’ fintech arm UBX and Ping An’s associate firm OneConnect Financial Technology Co. Ltd., SeekCap provides a marketplace for multiple lenders to offer their loan products, allowing borrowers to choose the most suitable offering and apply for loans digitally on a single end-to-end platform.

Launched in Singapore on the sidelines of the Singapore Fintech Festival last week, the new platform seeks to drastically shorten turnaround time relative to traditional loan applications in the Philippines. Loans can be approved on the same day.

John Januszczak, president and CEO of UBX, said: “Ultimately, UBX’ underpinning strategic intent is to transform the lives of Filipinos, and accelerate their growth by connecting them to a whole new world of opportunities.

At present, the interest rate on this marketplace is 2 percent per month while the average tenors are three and six months, Januszczak said.

SeekCap earns a platform or referral fee for the approved loans while the accredited lender get the interest earnings from the accounts booked through the platform.

“The Philippines is a strategic market for OneConnect. Though the World Bank figure shows that only 35 percent of Filipinos have formal bank accounts in 2018, this figure is a good increment from the preceding years,” said Tan Bin Ru, CEO of OneConnect.

In the Philippines, more than 99 percent of all businesses are MSMEs, contributing 63 percent of total employment. However, only 9 percent of loans and financing from the major banks go to MSMEs.