UBX’s i2i Platform, Powered by FinScore, Help Solve Rural Banks’ Agri-Agra Market’s Lending Challenges

BSP saw a huge decline in lending to the Agriculture and Agrarian Reform Sectors

Bangko Sentral ng Pilipinas (BSP) Gov. Benjamin Diokno urges Congress to amend the Agri-Agra Law to expand the range of eligible rural beneficiaries and agricultural projects to comply with their agricultural lending obligations. 

This year, BSP saw a significant decline in total loans for agricultural and fisheries which negatively affects the supply of agricultural produce.

BSP Proposes a Solution

The BSP Governor urges Congress to strengthen the law and proposes the following measures to “create a more inclusive new economy by supporting the development needs of the agriculture sector.”

The proposed measures are the following:

    1. Strategic interventions to improve productivity and bankability of farmers and their enterprises

    2. Increase the institutional capacity of banks to assess

    3. Offer customized lending products to agricultural enterprises

    4. Develop the financial infrastructure to minimize the impact of the agriculture sector’s inherent risks through appropriate credit risk management instruments

 

Rural Banks Can Comply, The Solution is Within Reach

According to a position paper presented by the Chamber of Thrift Banks (CTB) to the Congress in 2017, “Offering lending to the agrarian sector, forcing banks to lend to a market that is not ready will just create another Financial Crisis because it will create a bubble of bad loans which the Philippines cannot afford.”

Rural banks can experience complications in providing lending services to a majority of agrarian and agricultural enterprises, specifically the unbanked and underbanked individuals, whose existing personal data and financial background may not be deemed creditworthy when putting under traditional assessment and credit scoring methods. And this can be one of the factors why rural banks would rather take a safer route in losses: paying for penalties, instead of taking the risk in providing loans to individuals and businesses in the Agri-Agra sector. 

Rural banks can have the ability to assess risk and offer more flexible types of loan products to their target market by adapting to a readily available solution–Telco Data Credit Scoring. This type of credit scoring system is specially developed for rural banks to assess creditworthiness, manage risk, reduce defaults, increase approval rates, thus giving ample opportunities to the Agri-Agra market to access credit.

The largest financial network in the Philippines, i2i, developed by UBX Philippines (FinTech arm of UnionBank of the Philippines), offers a credit scoring portal that can fast-track and enhance loan underwriting process. Powered by FinScore, the first company in the Philippines to use Telco Data Credit Scoring, it uses cutting-edge machine learning and advanced analytics to provide a credit decision in a matter of seconds based on more than 400 variables, including top-up patterns, voice and mobile data usage, duration of calls, SIM card age, and many more.

Fintech companies such as i2i and FinScore are constantly working hand in hand to bridge the gap between the financial institutions and the unbankable markets. To know more about this collaboration, you may refer to this article.

About i2i

i2i (www.i2i.ph) is the largest financial network in the Philippines. Developed by UBX, the award-winning FinTech arm of UnionBank of the Philippines, i2i enables rural bank members’ customers to send funds and payments to over 11,000 additional locations across the country. Another service made available by i2i is the Credit Scoring Portal that enables rural banks to assess risk on their loan applicants using alternative data, thus increasing opportunities to extend financial products to the underserved market. Interested parties may visit https://www.i2i.ph/home.

About FinScore

FinScore (https://www.finscore.ph/) is a financial technology company in the Philippines that offers powerful credit scoring solutions and fraud detection tools based on alternative data, including telco-based data, with over 400 variables. As the pioneer in lending and scoring of the unbanked in the Philippines, they continuously empower banks, financial institutions, and credit bureaus with flexible platforms to help them make insightful and reliable credit decisions. For more information about FinScore, visit www.finscore.ph, and follow us on LinkedIn and Facebook for the latest updates.

FinScore is a financial technology company in the Philippines that offers a powerful credit scoring platform and fraud detection tool based on alternative data, including telco-based data. 

As the pioneer in lending and scoring of the unbanked, we continuously empower banks, financial institutions, and credit bureaus with flexible platforms to help them make insightful and reliable credit decisions.

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