It is reported that the Southeast Asian banking as a service platform Netbank has begun a partnership with several alternative lenders that allow these lenders to expand their lending without needing to raise additional capital.
Netbank, the first BaaS platform to acquire a full banking license in the Southeast Asia region, is reported to currently be collaborating with three alternative lenders; Global Mobility Services (GMS), New Cross Credit Gate PH Inc. (Uploan), and Inclusive Financial Technologies Inc. (Blend PH). These fintech partners will identify clients and pass them on to Netbank, who will fund and book the loans on its balance sheet.
The arrangement allows the alternative lenders to expand without the need to raise additional funds. By removing a layer of banking, it creates a more efficient balance sheet structure that ultimately benefits Filipino borrowers.
This move comes after the recent news that Netbank has joined Mastercard on their Fintech Express programme, which will afford the BaaS platform access to Mastercard’s extensive range of digital-first products.
Uploan is recognised as a prominent lender to salaried individuals in the Philippines. It enters into a close partnership with major employers to offer loans as part of a financial wellness programme. 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 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 analyses 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, where most of the businesses were affected, Blend PH continues to provide lending to the small and medium businesses engaging in franchises which helps in restarting the economy. The collaboration of Netbank and Blend PH in conducting a detailed risk assessment that identifies lower risk groups, enables Blend PH to continue lending to this segment amidst the 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”, comments Jay Bautista, Managing Director of Inclusive Financial Technologies, Inc.
“It is good to work with a partner like Netbank”, added 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 programme through alternative lenders in the coming years”, added Jaymar Mendoza, Head of Operations of Netbank. “We expect the alternative lending market to be $1 billion (PhP50bn) in 2024 and $2 billion (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 programme of partnership with Filipino alternative lenders and expects to sign-up several new partners in the coming few months.
Netbank provides banking services on a fully white-labelled basis that allows Filipino fintechs to grow fast whilst reducing their operational costs. This will ultimately accelerate the level of financial inclusion and innovation. The bank provides simple, creative, low-cost solutions so that fintechs can open accounts, offer loans and better manage payments.