With products like REVI Credit, CIMB Bank can help democratize access to formal credit in the Philippines and show tremendous promise in driving financial inclusion, especially to the underserved.
Access to formal credit remains limited in the Philippines. According to the Bangko Sentral ng Pilipinas’ (BSP) latest financial inclusion report, around 54% of the adults with outstanding loans in the Philippines obtained such loans through informal sources, like family, friends, or informal lenders. Cost and inconvenience emerge as the primary barriers to access to formal credit. The BSP reported that the most cited reasons for individuals’ aversion to borrowing include high-interest rates, too many documentary requirements, and the need to put up collateral.
Given this, various government instrumentalities and financial institutions have recognized the role innovation plays in improving financial access, particularly to credit. CIMB Bank Philippines, in particular, has already made significant progress on this front through its Personal Loan product. Based on a survey conducted in December 2021, almost 3 in 4, or 74%, of its Personal Loan customers are first-time bank loan customers. Building on this momentum, the Bank has recently released another credit offering that makes formal credit more accessible to Filipinos.
Instant approval, higher credit limits, and lower interest rates
REVI Credit, CIMB Bank Philippines’ latest credit and Buy Now Pay Later product, offers a promising alternative to informal lending sources and even traditional formal credit products. It comes with many features that address many of the pain points borrowers commonly face when borrowing from the usual sources.
“One of the biggest barriers to formal credit is the application itself. Banks would usually ask for a lot of income and supporting documents, which Filipinos working in the informal sectors may not necessarily have. Not to mention, the evaluation process usually takes time, even weeks, which is not ideal if you need the money to spend now,” shares Vijay Manoharan, CIMB Bank Philippines’ CEO. “With REVI Credit, the application process is entirely digital and takes less than 5 minutes. The process is even easier for preselected users, who will not be required to submit income documents, thanks to CIMB Bank’s alternative credit scoring process.”
REVI Credit offers higher credit limits of up to PHP250,000 and interest rates as low as 1%. Customers also do not need to pay annual fees to maintain their credit line. They will only pay when they use the product.
Enabling flexibility
In its 2019 Financial Inclusion Report, the BSP shared that more than half of the Filipinos who borrowed money did so to meet basic needs and essentials, like food, house, rentals, and utilities. Unlike other credit products for which borrowers have limited use, REVI Credit offers multiple features. Customers can use it to pay bills and will also soon be able to use it to shop online and purchase online goods with installments through its Buy Now Pay Later (BNPL) feature. Most notably, REVI also lets its customers convert a portion of their credit lines into cash or a term loan at any time, giving them more flexibility and making it a good option for emergencies and unforeseen needs.
Driving innovation and financial inclusion
Since its full launch for all CIMB Bank customers last December 2021, REVI Credit has already issued a total credit limit of over PHP2B to its users. It has also recently received two awards from the UK-based Global Banking & Finance Awards under the Excellence in the innovation category. On this note, the bank eyes to make REVI more accessible and offer it to more than 1 million CIMB customers in the next two years.