Mynt offers loan through GCash

MANILA, Philippines — The operator of GCash is making loans available through the mobile wallet service and lending arm Fuse Lending Inc. to make financial services accessible to the unserved and unbanked. Globe Fintech Innovations Inc. (Mynt) president and CEO Anthony Thomas said GCredit or the credit line attached to a GCash account seeks to help individuals unable to borrow from financial institutions to avoid having to turn to informal lenders.

Individuals who turn to informal lenders usually fall into a debt trap as they are charged exorbitant interest rates of 20 percent or higher in exchange for extending loans without collateral or any documentary requirements. 

Fuse president and CEO Jean-Francois Darre said access to GCredit would be determined by the GScore which shows the financial capacity of an individual to pay back a credit based on his or her GCash usage. 

As GCredit is still at its beta stage, the amount an eligible GCash user can avail of depending on his or her GScore is only at P1,000 to P5,000 at an interest rate of five percent, at present.

The service is also available to only 100,000 GCash users for now. 

Darre said the amount of loans to be made available, as well as number of users eligible to avail of the service however, are expected to increase in the future.

“It’s going to grow in the future as we learn to make this product efficient and we learn about the risks,” he said. 

As the trust is built with the GCash user, he also said the interest rate for the loan could potentially go as low as two percent.

More than creating opportunities for the financially underserved sector, Thomas said the offering is expected to increase GCash usage. 

“What this really solves is it creates more loyalty and more usefulness and relevance in our user’s life because they already use us for so many use cases for GCash. Now, they have an incentive to continue to do it and we are creating convenience at the moment they start establishing that repayment pattern. We can actually assure them of even more with less. So, we get greater credit limits but lower interest rates,” he said.