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SUNDAY, OCTOBER 7, 2018
Business
Ray S. Eñano, Editor / Roderick dela Cruz, Issue Editor business@manilastandard.net
FORMER BASKETBALL PLAYER CHANGES PH LENDING SECTOR A
Ester Manahan, (center) a seamstress from Bulacan, is the 10 millionth member of Cebuana Lhuillier’s 24K Plus Card Loyalty Rewards program, making her P100,000 richer. With Manahan are Cebuana Lhuillier officials led by president and chief executive Jean Henri Lhuillier (second from right).
FORMER basketball player, entrepreneur and banker is now helping transform the lending sector in the Philippines with the use of a mobile app.
Michael Singh, the co-founder and chief executive of AsiaKredit, developed a mobile app that offers immediate and short-term cash loans between P2,500 and P15,000 to customers who need the money for tuition, medical expenses, utility bill or business capital. Singh says AsiaKredit aims to serve “unbanked” customers who are unable to access formal financial services such as credit and deposits and who rely mostly on friends, family and informal lenders. “With those customers in mind, our main competitors are the informal money lenders who charge exorbitant interests rates and penalties, and take little effort for the customer’s experience,” he says. Singh, a second-generation Filipino-Indian who was born in the Philippines, was an amateur player at the Philippine Basketball league and a varsity athlete of Ateneo de Manila University where he was taking Political Science, when his parents sent him to the United States in 1992 to finish his undergraduate course at DePaul University in Chicago. “I played at UAAP for Ateneo in college while also playing in the Philippine Basketball League. My parents were worried about my studies, so they encouraged me to complete my last two years of undergraduate studies in the United States,” Singh says in an e-mail interview. “Basketball primarily instilled in me a drive to perform. It taught me that if you want to achieve something, you have to put in the hard work and sacrifice. It also taught me the dynamics and importance of a team. An athletic team environment is very similar to a business. You outline your goals and objectives, you build your team and foster trust and respect, you device your game-plan with precision and science, and you execute,” he says. In 1995, he co-founded the Nacho King food concept, which now has more than 150 retail outlets nationwide. He also launched the successful start-up pinoyauctions.com, which was later acquired by ABS-CBN Interactive Inc. Singh obtained a Master ’s in Business Administration from Northwestern UniversityKellogg School of Management in 2006 and went on to become a banker. He joined Hong Kong and Shanghai Banking Corp. in San Francisco as vice president in 2007. In March 2010, he moved back to Chicago to become the chief operating officer of Alpha USA. He returned to the Philippines in 2015 and was appointed senior vice president of Rizal Commercial Banking Corp., where he was in charge of retail product and marketing group. In October 2016, he decided to help establish AsiaKredit to provide “a ground-breaking fast and convenient consumer loan product through a mobile app to Southeast Asia’s half a billion unbanked”. Singh says he decided to leave the formal banking sector because it was largely a corporate lender or a bank for the upper to middle-income segment. “The banks had little appetite nor the expertise or infrastructure to service the needs of the bottom-half of the pyramid, which happen to be 70 percent to 80 percent of the adult Philippine population,” he says. He describes AsiaKredit, which he co-founded, as a fully digital consumer lender that is venturebuilt and funded by Singapore-based Forum, the largest financial technology venture builder in emerging Asia led by serial entrepreneur Greg Krasnov, and Fintonia Group, an early stage fintech investor in Southeast Asia led by Adrian Chng, the former chief executive of JobsDB and current CEO of GoBear. Other investors are Sig Asia Investments,
CEBUANA NOW HAS 10M CARD MEMBERS
AsiaKredit co-founder and CEO Mike Singh
Reliance Indonesia Group and Space Ventures. Headquartered in Singapore, AsiaKredit currently operates in the Philippines through pera247.ph. The Manila team includes digital marketing and operations experts with world-class experience from the likes of Lazada, Hinduja Global Solutions and Thompson Reuters. “Our risk, analytics and IT team in Eastern Europe leverages its prowess in alternative data analytics, credit-scoring algorithms and integrated technology solutions from Eastern Europe, where digital finance has reached a level of sophistication,” says Singh. He says that in a little over six months of operations, pera247.ph has leveraged its digital technology to process over 200,000 applications. “We plan to grow our loan disbursements exponentially in the coming months,” he says. On why he decided to put up pera247.ph, Singh says: “In the Philippines, there is a clear demand for consumer loans”. “The Philippines ranks among the lowest in the world in terms of bank account and credit penetration for its citizens. There are only approximately 15 million to 20 million bank accounts in a country with 70 million to 80 million Filipino adults. Worse, there are only approximately 3 million unique credit cards yet, we know that 7 in 10 Filipino adults borrow, mostly from family and friends, or informal lenders, and only 1 in 10 borrow from formal institutions,” he says. “According to the BSP [Bangko Sentral ng Pilipinas], the Philippines has seen sustainable growth in consumer loans since 2008. Add to that
the burgeoning usage of smartphones and there is a clear opportunity to utilize digital channels to close the financial inclusion gap. This is where AsiaKredit comes in,” he says. “Our ability to use mobile phone data to assess credit risk and issue loans to a segment of the market shun by the traditional banking sector, positions us to contribute to the BSP’s financial inclusion initiative,” says Singh. “The impact of digital finance is manifold and is exactly what AsiaKredit [pera247.ph parent] intends to achieve—to offer convenient, shortterm credit to those who need it most—be it small business owners, families with school-going children, or those with emergency needs,” says Singh. AsiaKredit currently has 50 employees, including 35 in Manila and 15 in Eastern Europe. Singh says that since operations began in November 2017, “we have hit all the major milestones that we have established for the business, some ahead of schedule.” “For example in a little over half a year, we have already processed close to 200,000 applications and disbursed over $1 million in loans. We have also already achieved product level break-even. Our repeat customer rate is also over 50 percent. We are gearing up to scale the portfolio to a significant size in the last quarter of the year and into 2019. We also intend to introduce new products such as an instalment loan with larger ticket sizes and longer loan terms,” he says. AsiaKredit charges a 5-percent processing fee. Interest rate is between 0.7 percent and 0.8 Turn to C2
C E B U A N A L h u i l l i e r, t h e co u nt r y ’s l a rg e s t m i c ro financial company, has signed up the 10 millionth member of its 24k Plus Card loyalty rewards program, reaching a new milestone for the program since its launch in 2009. Ester Manahan, a seamstress from Bulacan, was awarded P100,000 in cash, a Lifetime Alagang Cebuana Plus Gold insurance coverage from Cebuana Lhuillier Insurance S o l u t i o n s, a g o l d e n 2 4 K card which doubles points for every transaction plus added perks, and a plaque of appreciation during an awarding ceremony in Makati City. “Cebuana Lhuillier has been providing excellent customer service to our clients for many years. It is a commitment that we will continue to keep in the years to come because of clients like Ester who keep Cebuana Lhuillier going. The innovations that we implement always put customer satisfaction first,” said Cebuana Lhuillier president and chief executive Jean Henri Lhuillier. The 24k Loyalty Rewards Program is a first-of-its-kind in the pawning industr y. Through the 24k Plus Card, members can earn points for every transaction—pawning, money remittance, insurance p ro d u c t s p u rc h a s e, b i l l s payment and e-load—at any of Cebuana Lhuillier’s close to 2,500 branches nationwide. Th e c a rd a l s o gra n t s i t s m e m b e r s w i t h e xc l u s i ve privileges, discounts and special service offerings. To date, the 24k Plus Card has given more than 10 million loyal Cebuana Lhuillier customers more purchasing power—adding value for their money—as the points have monetary equivalent, which they can then use to pay off interest fees for pawns, or remittance fees, even load credits for their prepaid mobile phones.
PH FIRMS ASKED TO EMBRACE ARTIFICIAL INTELLIGENCE By Othel V. Campos
Grant Thornton partner Depender Kumar
COMPANIES in the Philippines need to adopt technologies like automation and artificial intelligence to get rid of repetitive and redundant processes, a partner of business advisory firm Grant Thornton says. Depender Kumar, in his presentation during the 8th P&A Grant Thornton Business Forum in Manila, says Philippine companies, including business process outsourcing providers, are slow to embrace automation and struggle to change. “To be honest, if they [BPOs] don’t change the way they do things, they will pay locally for the disruption. Most of what is done by the BPOs are repetitive. You don’t need a lot of intelligence to do the work that is with you. That is why those jobs are outsourced earlier. At the same time, if you
need to survive in that industry, you need to adopt technology along the way,” he says. Kumar says as part of digital transformation and disruptive technology, management must think digital, taking risks and responding to technological trends to stay relevant. “A World Economic Report cites that by 2022, 85 percent of corporates are likely to expand adoption of user and entity big data analytics, the internet of things, and app- and web-enabled markets, and to make extensive use of cloud computing,” he says. He says that in the Philippines, big conglomerates and BPOs have already started the adoption of automation in the call center and manufacturing industries, but the adoption rate is still slow. Kumar says among the industries where AI will have the strongest impact are technology,
media, telecom, consumer, professional services, healthcare, industrial, energy, public sector, finance/ accounting and manufacturing operations. “With AI in place, businesses stand to face several challenges such as disruption in business model, access to data, finding the right talent, jobless and re-skilling of existing workforce and disruption in operating model,” he says. Despite the challenges, AI is expected to benefit businesses, Kumar says. He says with the start of the digital age and the presence of AI, companies stand to benefit from new product development and enhancement of existing product; higher operational efficiency; improved decision making; better customer and employee experience; increase in sales; and better niche by differentiating and determining the competitive advantage.