Digital lending as a hedge against inflation

Digital lending as a hedge against inflation | Daily Tribune

When the interest rate is low, inflation could work in favor of the debtor. And many Filipinos are taking on digital borrowing amidst rising inflation and financial pressure, according to a survey by financial technology firm Tala.

According to the company, data showed that 59 percent of Filipinos prioritize digital lending options to access financial windows as a hedge against inflation, highlighting the growing demand for innovative financial services in the country.

“This shift towards digital alternatives demonstrates the need for flexible and reliable financial tools that empower Filipinos to navigate unforeseen circumstances,” says Iona Iñigo-Mayo, senior director for Global Customer Experience Operations at Tala. “As a pioneer in the digital lending space, Tala is committed to providing responsible and accessible credit solutions that help Filipinos achieve their financial goals.”

The survey also sheds light on Filipinos’ financial realities in today’s economic climate. Eighty-four percent of customers feel the pinch of inflation, with 59 percent citing rising living expenses as their primary financial challenge.

Unexpected medical expenses and seasonal expenditures add to the pressure, with 38 percent struggling to meet their monthly income.

To cope with these challenges, Filipinos are showing resilience and resourcefulness. Fifty-eight percent have taken on side hustles or started businesses to generate additional income, while 72 percent believe they have the necessary tools to manage their finances.

This self-reliance is further evident in the preference for digital lending options, which offer greater convenience and transparency than traditional methods.

Bea, a Tala customer who relies on Tala to fund her small business, said, “Noong sinubukan ko ang Tala, nagkaroon ako ng pag-asa na kaya kong palakihin ang business ko. Dahil kaya ko na mamuhunan nang malaki, kaya ko na rin mangarap nang malaki.” (“When I tried using Tala, I started hoping to grow my business. Because I have more funds for my business, I can also dream bigger.”)