More Pinoys eye new loans this year

As credit access eases

MANILA, Philippines — Eight in every 10 Filipinos saw more accessible credit options last year, with more than 50 percent of them eyeing to take new loans this year.

A recent analysis conducted by consumer finance firm Digido showed that 80 percent of Filipinos believe formal credit options have been more accessible.

As such, 57 percent of Filipinos intend to take out a new loan this year while 19 percent of consumers already have plans in place to do so.

On the other hand, almost 40 percent indicated that they will avail of a loan if the need arises.

The survey also revealed that 56 percent of respondents chose online as their preferred channel for obtaining formal credit, compared to 37 percent for offline channels.

Digido said demand for online channels is highest in Metro Manila and among the middle-income group due to higher standard of living and degree of digitization.

Room for improvement in terms of customer experience for all formal credit institutions remains, specifically for loan rates, better repayment schedule, and more repayment methods.

Last year, 57 percent of respondents had at least one outstanding loan from a formal lender, with non-bank financial institutions with an online component making up 31 percent of them.

This is followed by traditional banks’ branches, digital banks, and other applications.

However, still nearly 50 percent borrow from informal options, such as friends and family members.

FIlipinos cited the easy application process, convenient repayment methods, and high probability of approval as the key factors that have influenced their decision in applying for a formal credit source last year.

Other factors also include convenient repayment schedule, application through mobile apps, and attractive interest rates.

Digido is part of the larger Singapore-based Robocash Group that is servicing clients across key markets in Europe and Asia.