MANILA, Philippines — The local banking arm of Malaysia’s CIMB Group has extended P2 billion to users of its low interest rate loan facility that features instant approval and higher credit limits, making a stronger push toward greater financial inclusion in the country.
Vijay Manoharan, CEO at CIMB Bank Philippines, said the bank has already made significant progress on this front through its personal loan product.
Since its full launch last December, REVI Credit has already issued a total credit limit of over P2 billion to its users.
Its latest credit and Buy Now Pay Later product offers a promising alternative to informal lending sources and even traditional formal credit products. It comes with a multitude of features that address a lot of the pain points borrowers normally face when borrowing from the usual sources.
“One of the biggest barriers to formal credit is the application itself. Banks would usually ask for a lot of income and supporting documents, which Filipinos working in the informal sectors may not necessarily have. Not to mention, the evaluation process usually takes time, even weeks, which is not ideal if you need the money to spend now,” Manoharan said.
Under REVI Credit, he explained that the application process is entirely digital and takes less than five minutes.
He said the process is even easier for pre-selected users who are not required to submit income documents due to the bank’s alternative credit scoring process.
REVI Credit offers higher credit limits of up to P250,000, interest rates as low as one percent, and customers also do not need to pay any annual fees to maintain their credit line.
Based on a survey CIMB conducted last December, almost three in four or 74 percent of its personal loan customers are first-time bank loan customers.
CIMB is strongly supporting the push of the Bangko Sentral ng Pilipinas (BSP) for a stronger financial inclusion in the country.
Based on the latest financial inclusion report of the BSP, around 54 percent of adults with outstanding loans in the Philippines obtained such loans through informal sources like family, friends, or informal lenders.
Cost and inconvenience emerge as the primary barriers to access to formal credit, with the BSP having reported that the most cited reasons for individuals’ aversion to borrowing include high interest rates, too many documentary requirements, and the need to put up a collateral.
In its 2019 Financial Inclusion Report, the central bank shared that more than half of the Filipinos who borrowed money did so to meet basic needs and essentials, like food, house, rentals, and utilities.
“Unlike other credit products, which borrowers have limited use for, REVI Credit offers multiple features. Customers can use it to pay bills and will also soon be able to use it to shop online and purchase online goods with installments through its buy now pay later,” CIMB added.
REVI Credit also lets its customers convert a portion of their credit lines into cash or a term loan any time, giving them more flexibility and making it a good option for emergencies and unforeseen needs.
Established in 2018, CIMB Bank is currently serving over 5.2 million Filipinos and over one million lending customers.