Cebu-based coop finds low-cost loans feasible

Cebu CFI Community Cooperative plans to upgrade its digital tools to extend affordable loans to more individuals and enterprises nationwide.

Cebu CFI president and CEO Pablo Garcia said the loan portfolio of the 53-year-old cooperative expanded from P5 billion to P9 billion in 2020 through its use of modern computers and mobile apps.

"In the past, computers of cooperatives were from the nineties so they didn't have the technological capacities to deploy financial services easily. Now, people can borrow digitally," Garcia told the Daily Tribune in its show "Business Sense with Komfie Manalo" on Monday.

The cooperative offers online personal, health, salary, housing, education and business loans with interest rates of 7 percent to 9 percent per annum. In contrast, Garcia said big banks can impose up to 12 percent per month and 20 percent monthly from informal lenders called 5-6 lenders.

Garcia said customers can pay their loans and other Cebu CFI products as easily as using an e-wallet.

Garcia shared that the cooperative recently received P4 billion from the Land Bank of the Philippines and is discussing another financing project with the Small Business Corporation of the Department of Trade and Industry.

Digitalization makes it happen

Through digitalization, the cooperative can lend faster without their customers going to its main office in Capitol Compound in Cebu or its branch in Makati City.

"There is no annual fee and you have access to all our digital services as well. You have access to finance easily in your pocket or on your computer," he said.

"We are a friendly financial partner hoping to provide financial stability for Filipinos at the lowest interest rate in the Philippines," Garcia added.

As a cooperative, Cebu CFI is able to further provide loans through its members' contributions which the company pools and reinvestments in other businesses, such as real estate and food. Gains from these investments are then distributed to the members digitally.

"Through the funds that you put in the cooperative or the funds that we lend to you as a cooperative, we are able to create programs that allow you to increase your incomes. We do this together," Garcia said.

"Our members and their families are able to grow through our education and business assistance and opportunities for comfortable housing. So, the effect is we help the economy not just in the long term, but even in two to five years."

For example, Cebu CFI offers members loans to put up their own Five Star Manok, a chicken franchise originated in Thailand and uses a mobile app to facilitate all business transactions.

After all these digital efforts, Cebu CFI has increased its assets to P15 billion and gained trust from government lenders for additional capital to support its growing demand for personal and business loans.