Netbank has started a partnership with several alternative lenders that allow these lenders to expand their lending without needing to raise additional capital.
Netbank, the first Southeast Asian banking as a service (BaaS) platform operating through a bank license, is working with 3 leading alternative lenders; Global Mobility Services (GMS), New Cross Credit Gate PH Inc. (Uploan) and Inclusive Financial Technologies, Inc. (Blend PH). The Fintech partners identify clients and pass these clients to Netbank, who then funds and books the loans on its balance sheet.
The arrangement allows the alternative lenders to expand without the need to raise additional funds. It creates a more efficient balance sheet structure, by removing a layer of banking, and this ultimately benefits Filipino borrowers.
Uploan is a leading lender to salaried individuals in the Philippines. It enters into close partnerships with major employers to offer loans as part of a financial wellness program. The borrower simply repays these loans via a deduction from the payroll of the clients, paid directly to Uploan. There is a very large demand for these low-cost loans within the Philippines, since Uploan’s loans typically replace very high cost informal / ‘money-shark’ loans, which jeopardise the livelihood of employees and ultimately undermines an employee’s ability to work. Uploan originates clients through its digital interface, providing a simple and transparent service.
GMS is an innovative FinTech platform provider, providing services that enable drivers of motorbike tri-shaws/ tricycles (low-cost public transport) in Manila, Cebu and Davao. Loan repayment is assured by attaching an immobilisation/location device to the motorbike. By analysing vehicle data (driving status, speed, etc.) collected via the device and the financial data (payment status, etc.) obtained in conjunction with Netbank, GMS and Netbank ascertains the creditworthiness of drivers and allows people who are typically unable to qualify for conventional credit to take out loans and leases.
Blend PH is a peer-to-peer online funding platform. It caters to the financial needs of every Filipino all over the country. Amidst the COVID-19 Pandemic, which affected most businesses, Blend PH continues to provide lending support to small and medium businesses, particularly those engaging in franchises which will help to restart the economy. Netbank and Blend PH have been working together to conduct a detailed risk assessment which identifies lower risk groups, and this enabled Blend PH to continue lending to this segment amidst the COVID-19 Pandemic.
Before launching these services, Netbank has ensured that it fully understands the risks involved. For example, Netbank and Blend PH collaborated with both the Franchisors and the Franchisees, allowing a full assessment of the lending risks and opportunities.
“We are very happy with the flexibility and ease that Netbank offers to its Fintech and lending partners. With our continued business expansion, we are glad to work with a partner like Netbank”, said Mr. Jay Bautista, Managing Director of Inclusive Financial Technologies, Inc.
“It is good to work with a partner like Netbank”, added Mr. Kazumasa Nakashima, CEO of Global Mobility Service Philippines, Inc. “They are able to continue lending even amidst the COVID-19 Pandemic.”.
“We see huge opportunities to expand our lending program through alternative lenders in the coming years”, added Jaymar Mendoza, Head of Operations of Netbank. “We expect the alternative lending market to be $1bn (PhP50bn) in 2024 and $2bn (PhP100bn) in 2026. Netbank will be a major contributor to this growth”.
Netbank is focusing on supporting responsible lending and will avoid all forms of loans with usurious interest rates. “As a bank, we are very aware of our responsibility to all our stakeholders and so will only lend to lower risk segments at reasonable interest rates” added Jaymar.
Netbank will continue to expand its program of partnership with Filipino alternative lenders and expects to sign-up several new partners in the coming few months.
Netbank is the first banking as a service platform in Southeast Asia. It provides banking services, on a fully white-labelled basis, so that Filipino Fintechs grow fast and reduce their costs, thus accelerating financial inclusion and innovation. It provides simple, creative, low-cost solutions so that Fintech can open accounts, offer loans and manage payments.