GoTyme opens lending window for TikTok sellers
Albert Tinio —MEG J. ADONIS
MANILA, Philippines — With the e-commerce sector turning more competitive by the day, small entrepreneurs may often find it difficult to stand out and scale their business faster than their peers.
For digital bank GoTyme Bank Philippines, the key is removing barriers to capital, specifically quick loans that offer immediate aid for sellers looking to either restock their inventory or buy tools that could upgrade their services and products.
“While selling has become easier, scaling—as in the ability to meet demand, prepare for peak sales moments or invest in operational improvements—still hinges on whether a seller can access working capital,” GoTyme co-CEO Albert Tinio says in a press briefing.
“And, too often, the answer to this is: They can’t,” he adds.
This presents a big problem for a certain percentage of the Filipino workforce. Currently, micro, small and medium enterprises (MSMEs) make up more than 99 percent of businesses in the Philippines, employing 64.67 percent of the local workforce and aptly earning them the reputation of being the backbone of the local economy.
Content creation + product selling
Chief among the emerging platforms now for MSMEs is TikTok Shop, which blends content creation with product selling.
As the number of sellers grows and the needs of consumers evolve, sellers now face the challenge of capturing more markets.
GoTyme and TikTok responded to this need by launching TikTok Shop Loans on Thursday, intending to help MSMEs access fast and flexible capital.
By design, a specific number of prequalified TikTok Shop sellers—those who have a good track record and are seen capable of repaying loans—can check their mobile applications and apply for a loan.
READ: GoTyme looks to kiosks for millions of new clients
Loan packages
According to Tinio, loan amounts are based on a seller’s transaction history on the TikTok Shop platform. This is also the basis for interest rates, which can range from 1.5 percent to 2.5 percent per month.
Loan terms can go as short as three months and last up to 12 months. Disbursement of funds can be done within a day, and repayment is made through bank transfers or QRPh.
GoTyme and TikTok Shop have extended loans to 16 merchants since soft launching the product last week.
“Overall feedback has been good so far and it (number of merchants) will slowly start to increase in the next couple of weeks,” says GoTyme strategic partnerships lead Jose Roberto Zaldivar.
Although GoTyme did not disclose the exact number of merchants it plans to extend loans to, Zaldivar says they aim to capture at least 20 percent of the TikTok Shop seller base.
READ: TikTok Shop getting bigger slice of e-commerce sales
2M sellers from the Philippines
Data from TikTok Shop show that as of October last year, the content creation platform hosted 2 million sellers from the Philippines with varying business sizes and types, including skin care and homegrown food brands.
In extending financial support to MSMEs through loans, GoTyme CEO Nate Clarke notes they want to “give sellers a quick and easy way to access funds while they focus on growing their business.”
The ease of applying for loans through TikTok Shop provides relief for at least 77 percent of Filipino MSMEs that have difficulty accessing financing, according to GoTyme. This is due mainly to the rigidity of traditional banks, which also often require many documents and employ a long application process.
“They (MSMEs) deserve financial solutions that not only empower their business but are also thoughtfully designed around their needs,” Tinio says.
READ: GoTyme Bank parent secures $250M fresh funding for expansion
