The parent firm of online lending firm Cashalo has raised $20 million to grow the fintech firm’s loan book and roll out more solutions to Philippine consumers and microentrepreneurs who are shunned by traditional banks.
Cashalo’s Hong Kong-based parent firm Oriente – a holding firm backed by Gokongwei-led conglomerate JG Summit, family offices including members of the Berjaya Group and Sinar Mas – secured a debt facility from asset investment firm Silverhorn Group.
The $20 million facility, which can increase up to $50 million, is intended to grow Cashalo and extend the reach of its digital-credit and buy now-pay later solutions to millions of undervalued and credit-starved consumers and micro-enterprises in the Philippines. This is the largest debt financing with an institutional lender Oriente has secured to date, thus seen as a vote of confidence on the quality and bankability of its fast-growing loan book.
To date, Oriente has raised over $105 million in equity. This new funding is seen in line with its commitment to invest and expand financial access responsibly in the Philippines.
“We are excited to have won the confidence of Silverhorn Group. As we enter the next stage of growth on our mission to helping ignite economic opportunity for tens of millions of consumers and micro-enterprises, the support we receive from our debt partners is critical. We look forward to strengthening our relationship with Silverhorn and invite other investors to join us as we accelerate our efforts to build the future of finance in Southeast Asia,” Geoffrey Prentice, co-founder of Oriente, said in a press statement on Tuesday.
Since its launch, Cashalo has grown over 20 percent each month. In less than 18 months, its app has been downloaded over 6.5 million times while its user base has expanded to over 2.5 million. The firm has now helped over 1.5 million previously “credit-invisible” Filipinos build financial identities for the first time.
For Silverhorn, this represents another high-potential investment in ASEAN and in the fintech space. In addition, these funds will help diversify the funding mix of the company’s loan book.
Mike Imam, managing partner at Silverhorn Group, said: “Oriente shares our values of promoting financial inclusion in Southeast Asia. To date, it is one of the very few non-bank lenders that can leverage on alternative data points and an algorithmic risk engine to underwrite credit to the underfinanced populations in the region. This helps originate and provide a portfolio construction building brick which is higher yielding, predictable and uncorrelated to traditional asset classes. We’re thrilled to work with Oriente to fuel its growth and unlock potential for communities across the ASEAN region.”
Over 11 percent of the world’s unbanked population – between 40-70 percent of adults – rely on informal lending sources and only 33 percent of Southeast Asian small and medium enterprises (SMEs) have access to loans or lines of credit. Research by the Asian Development Bank estimates that addressing this issue and closing the financial inclusion gap could increase gross domestic product by 9-14 percent in Southeast Asian economies and generate more than $380 billion in annual banking revenues globally.