Social media mostly helped increase knowledge on credit or loan products among residents in Metro Manila, while those in rural areas still relied on information shared by their relatives and friends, a study by TransUnion Philippines, a credit scores and insights provider, showed.

TransUnion’s 2024 Credit Perception Index revealed that 65 percent of urban dwellers preferred social media as their top source for information on credit products.

Meanwhile, 59 percent sought information directly from agents of banks and other financial institutions.

Credit products preference

“Urban residents demonstrate a stronger understanding and thus preference for credit products compared to those in more rural regions, potentially due to differing sources of credit information,” TransUnion principal of research and consulting for Asia-Pacific Weihan Sun said.

TransUnion said Metro Manila residents exhibited deeper credit product knowledge, with a score of 70 compared to suburban residents with 59 points, and more rural residents with 51 points.

On the other hand, most suburban residents or 63 percent and 60 percent of more rural dwellers relied on family and friends for credit product knowledge.

Just a little over half or 51 percent of the suburban group and 44 percent of those in more rural areas sought information from financial institutions.

Limited exposure

“Given that suburban and rural residents rely more on their personal networks for credit information, this may limit their exposure to the latest credit trends and professional insights,” Sun stressed.

Deeper credit product knowledge, Sun said, is linked with higher financial capacity as the TranUnion study showed 74 percent of urban residents felt more confident in meeting their daily needs compared to 65 percent of suburban residents and 55 percent of more rural dwellers.

As a credit insights provider, TransUnion urges businesses and the government to streamline and expand efforts on financial inclusion in helping all Filipinos obtain benefits of various financial products in the long-term.

“With regional economies heading in a positive direction, through education and collaboration, we can help ensure no Filipino gets left behind in the progress towards a more financially inclusive nation where everyone is empowered to build better lives,” Sun said.

If used properly, loan products can help Filipinos own decent homes and other real estate, vehicles, or other hard assets for personal or entrepreneurial purposes to increase their wealth.