Adelantos Capital Corp., a Panama-based lending company which operates under the Adelantos brand, is cooperating with Cable & Wireless Panamá, the largest mobile network operator in the country, to launch a new financing product aimed at price-sensitive customers who seek an upgrade of their phones for top-notch 4G devices.
Adelantos is a well-known Panamanian lender serving people with no or bad credit history by providing a solution: up to 3-month installment loans from $50 to $500 to confront the liquidity crisis. This summer, Adelantos has announced a new joint product with Cable & Wireless Panamá, an MNO that serves 1.6 million mobile clients in the personal segment (over 50% of active subscribers countrywide): the first cell phone financing in Panama. The product called Adelantos Movil is available in Cable & Wireless Panamá stores (21 locations around the country with plans for further expansion).
The new product highlights a mobile focus chosen by Adelantos. From the very beginning in 2016, Adelantos has been providing loans in a modern and innovative way: via smartphones. The whole application process is integrated into a free app which can be downloaded from Google Play Store. Now, the company expands its presence in the local mobile market by kickstarting a device lending campaign.
For this product, Adelantos has also partnered with PayJoy, a fintech company from Silicon Valley. PayJoy patented technology for locking smartphones enables pay-as-you-go access to the phone. This technology allows Adelantos to better served the unbanked population, taking a step closer in reaching financial inclusion.
According to recent reports, less than 20% of Panamanians have credit cards, and only 50% have bank accounts. Besides a credit card or a bank account, to qualify for a traditional loan a Panamanian needs employment documents (Ficha de Seguro Social) and an agreement signed which means that the credit repayment amount will be deducted from salary (Descuento Directo). Moreover, the loan procedure requires a couple of days to happen.
Adelantos Movil makes getting loans easier hence reducing the paperwork. The financing is made instantly: a client leaves the store with his new phone and makes payments voluntarily. For example, Adelantos Movil offers purpose loans to those who work as independent entrepreneurs and do not have “Ficha de Seguro Social” (unlike public and private sector employees). Unlike the core product, installment loans, device lending by Adelantos does not require a bank account. Having no or bad credit history does not disqualify you: according to Adelantos representatives, the company’s proprietary scorecard that has hundreds of variables is continuously improving by means of big data and AI; it is able to approve financing to clients that are not accepted by traditional lenders due to their credit history.
“This is a big step for Adelantos in the process of providing more inclusive financing opportunity to a segment that has not been financed before,” says Raymond Katz, CEO of Adelantos Capital Corp. “We are very excited with this new Adelantos Movil product to be able to serve the whole country because a bank account is not required to get cell phone financing. Smartphones are essential for our day-to-day activities; Adelantos Movil is helping those segments of customers that either cannot access smartphones or have access only to low-end phones to be able to get a better device.”
Currently, cell phone financing is available for Samsung and LG devices such as Samsung Galaxy and LG Prime series, with more brands being expected by the end of the year.