GCash: Empowering MSMEs through fair credit

SINGAPORE — GCash, the Philippines’ leading financial super app, took center stage at the Singapore FinTech Festival (SFF) 2024 – sharing with its global audience how the company empowers and uplifts the lives of Filipino small business owners, such as the unbanked wet market vendor and the aspiring furniture-maker, by providing access to fair and sustainable credit.

In a panel discussion titled “Safeguarding the Economy’s Backbone: Accelerating Global SME Financing through Digital Services, GCash president and CEO Martha Sazon,  together with an influential panel of global leaders led by Amazon VP of payments for emerging markets Mahendra Nerurkar, Ant International president Doug Feagin, Rwanda Minister of ICT and Innovation Paula Ingabire and National Bank of Cambodia governor Serey Chea, discussed how digital solutions can break down barriers for micro, small and medium enterprises (MSMEs), driving sustainable economic growth not just in the Philippines, but worldwide.

In a country where loan sharks thrive and MSMEs dominate the business landscape, Sazon said that access to fair lending is vital in helping the Philippines attain a sustainable and inclusive economic growth.

“The best we can do for MSMEs is to expand access to fair credit. At the heart of financial inclusion is access to fair credit, especially among small merchants. That gives them a better chance of success,” Sazon said.

Because of digital platforms like GCash, Sazon said eligible small business owners or those who want to start their own small venture could avail themselves of loans without having to submit numerous documents or collateral traditionally required by banks.

“This is all possible because of GCash’s proprietary digital trust rating solution called GScore. A borrower can easily be verified and be given loan approval instantly without having to undergo a tedious application process. All they have to do is log in to the app, tap its services and get access to fair credit,’’ she said.

GCash, through its lending arm Fuse, disbursed over P155 billion in loans to 5.4 million unique borrowers, with two out of three borrowers being women, from lower socio-economic classes, or located outside Metro Manila.

The e-wallet giant said the launch of its loan service has opened the door to digital lending for many Filipinos who borrow money from informal sources.

The BSP is targeting a 10 percentage share of MSME and agricultural loans by 2028.  As of 2021, the share of the two sectors, was recorded at only one percent separately.

The BSP cited data that shows some reasons that hinder Filipinos from accessing credit, including lack of money to open bank accounts (45 percent), documentary requirements (26 percent), and proximity to financial institutions (eight percent), while others (31 percent) also report being intimidated by traditional bank processes.

‍GCash has become the Philippines’ first and only $5-billion unicorn, tripling its pre-pandemic user base to over 90 million Filipinos in 2023, and is now a household name across the country.

Organized by the Monetary Authority of Singapore and Elevandi, SFF 2024 is a global fintech event that attracts thousands of participants all over the world. The festival aims to bridge connections among leading industry players, regional trade visitors, innovators and startups to catalyze growth for the fintech ecosystem.