The GCash mobile app now has a feature called GCredit, a credit line attached to one’s GCash account with funds that can be used to shop (buy groceries, medicine, school supplies, and so on) in partner merchants via GCash scan-to-pay. The GCredit amount a GCash user can avail of is determined by her GScore, the first trust score in the Philippines that checks one’s capacity to pay back credit based on one’s GCash usage. Those who continue to use and pay their GCredit properly will get higher GCredit limits. GCredit is now at in beta and will be available commercially within the year. GCredit and GScore were announced at a media briefing last June 29 at Kickstart Ventures Office, Makati City.
GCash is a mobile service of Mynt, a fintech startup owned by Globe Globe Telecom, Ant Financial, and Ayala Corporation. According to Mynt:
- GScore addresses the problem of most Filipinos – they find it hard to access credit when they don’t have formal documents proving their financial capacity. GScore provides a “trust score” that can be earned just by engaging in regular GCash transactions – such as buying load, paying bills, purchasing goods and services, and so on.
- GCredit offers a way out of the “five-six” debt trap many Filipinos find themselves in. “Five-six” are informal or unlicensed money lenders who extend loans without requiring collateral of documentary requirements, but charge exorbitant rates of 20 percent or higher. This leads to a debt trap that forces one to keep borrowing just to stay afloat, a situation that can be avoided through GCredit. Once a GCash user pays her credit balance, the amount one can avail of replenishes instantly, giving her some peace of mind: she has ready access to funds in case of emergencies or celebrations. If she keeps using and paying her GCredit properly, she gets higher GCredit limits.
Fuse, the lending arm of Mynt, believes that data-driven lending will allow them to create a sustainable and scalable credit product in the country.
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