Mynt seeks to boost its microloans business in the Philippines
AFTER becoming powerhouses in fintech locally, Chinese firms are flexing their muscles to bolster their partners abroad.
A Philippine mobile payment operator that is partially owned by fintech giant, Ant Financial, is opening its payment platform to local banks to expand its microloans business.
The company – Mynt – is seeking to leverage on its Chinese shareholder’s risk management capability to further bring new offerings to the vibrant internet finance marketplace.
According to an SCMP report, its CEO Anthony Thomas, the purchase of 45 percent stake by Ant Financial has boosted Mynt’s ability to diversify its sources of revenue.
Mynt, operates mobile payment and remittance services out of Manila, via its operating platform – GCash.
In April, GCash rolled out the GCredit, which is a credit line extended to users to pay bills and shop offline. Creditors are required to settle the ‘loan’ within 15 days with a maximum interest rate of five percent.
The company recently has entered into talks with the banks in the Philippines to get them onboard as lenders on the platform.
“We want to increase our cooperation with banks. Ultimately, I don’t believe that Mynt has to be the only lender for GCredit, but GCash can be more of a marketplace on which other lenders could also [provide credit lines],” Thomas was quoted as saying.
GCredit is not available to everyone. The facility is only given to those with satisfactory “GScore” that acts as a credit score.
Alibaba’s direct involvement with Mynt’s risk management had tremendously benefited the company’s expansions of its microloans business, said Thomas.
Ant Financial, the fintech arm of Alibaba debuted its internet finance in China on its Alipay payment platform.
It has been able to take advantage of the platform’s superior technology and risk management capability to make it a global brand, penetrating markets as far as the Indian sub-continent, despite strong competitions everywhere it went.
The potential market for Mynt is vast in the Philipines – where two-thirds of the country lack access to bank account and credit card penetration is less than five percent.
The company and others like it have been functioning as a financial institution – offering payment services and loans.
Ant Financial bought 45 percent stake in Mynt in September, last year. It was previously a wholly owned subsidiary of the Philippines’ Globe Telecom.
But it does not end there.
Last month, Tencent, Alibaba’s biggest competitor in China announced that it has, together with American firm KKR, acquired a substantial minority stake in another Philippines’ fintech firm, Voyager, which operates Paymaya.
The US$175 million deal effectively sees the battle for tech supremacy between the two Chinese firms expanding to the Philippines.
With up to six percent of the country’s consumer transactions is expected to be paid by mobile payment platforms by 2022 – estimated to about US$362 billion – the investment into the Philippines fintech scene may not just slow down quite yet.
And if that trend holds, Philippines’ mobile phone operators and their payment platforms will continue to cut into the market share of the traditional financial institutions and give the banks a run for their money.