Startup offers cardless credit

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There is now in the market a smartphone-enabled app that allows Filipinos to obtain appropriately-priced credit with just one government-issued identification that allows one to purchase up to P20,000 worth of services or goods.

The product is called Cashacart, a so-called offline-to-online or O2O basket financing solution developed by the collaboration formed by JG Summit Holdings and Hong Kong’s Oriente which founded the internet giant Skype.

The service effectively extends Pinoys a credit card but without the hassle of filing an application and waiting for the approval process to complete, usually lasting weeks.
But with Cashacart, one need only sign up at any of an initial 250 partner stores around the country, present a single government-issued ID and have the registration processed and approved as quickly as 10 minutes.

In an interview, Cashalo general manager Hamilton Angluben said one has the flexibility to make a variety of purchases with the Cashacart service, unlike rival offerings that typically limit such purchases to only one item.

The extent of the credit line could be as little as P2,000 to as much as P19,999 payable over three-, six- or nine-month installments.

The interest charges compare favorably against those imposed by bank-issued credit cards at 3.99 percent a month. Credit card charges by comparison typically equal only 3.5 percent a month.

Angluben said a proprietary algorithmn has set the interest rate where it is for now to account for potential default on some of the borrowers down the line.

According to him, those borrowers whose application were initially declined could reapply as quickly as the following month. Rejections typically happen because propsective borrowers submit “inconsistent data” such as incorrect pictures, mismatched personal data and the like.
He also said submitting one’s birth certificate would not qualify as a valid ID although a passport or some other government-issued document.

Angluben re-emphasized the whole point to all this and earlier Cashalo offerings centered on empowering the unbanked Filipino that based on Bangko Sentral ng Pilipinas data account for 77 percent of the population.

That the Cashacart lending program could help push the broader government goal of greater financial inclusion is also important but only in so far as this helps financial sustainability, Angluben also said.

“Our aim is to be the engine driving financial inclusion for the Philippines, empowering millions of Filipinos that have been left behind by the limits of the financial systems and with no credit history, build financial identities to elevate their economic well-being and participat in the global economy,” he said, quoting the startup’s mission.

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