AsiaKredit extends into underbanked consumer financing with Lazada partnership

Wed Sep 18, 2019 - 4:51am GMT+0000

AsiaKredit - Lazada

From this September onward, Lazada shoppers can now purchase products and apply for monthly payment installments on the Lazada platform through AsiaKredit’s eShopaLoan.

The eShopaLoan targets the growing middle class in the Philippines to provide them the option to shop and finance consumer goods purchases through installment-based credits.

With eShopaLoan, Filipino consumers can make purchase via the Lazada online marketplace and LazMall in fixed monthly installments at a competitive interest rate. eShopaLoan finances products within the Php 5,000 (about US$95) to Php 50,000 (US$955) price range. Meanwhile, loans range from Php 4,000 (about US$75) to Php 20,000 (US$380) over a repayment period of six months.

Michael Singh, the CEO and co-founder of AsiaKredit said, “We are thrilled to partner with Lazada to offer consumers affordable, installment-based credit that helps them meet their personal and families’ lifestyle needs.”

“Our partnership with Lazada marks the beginning of many exciting and transformative retail partnerships we hope to embark on to improve access to finance for millions of underbanked Filipinos left out of the traditional financial system.”

As a matter of fact, the digital consumer finance fintech startup’s partnership with ecommerce retailers such as Lazada comes at a time when there is an increase in ecommerce transactions in the country.

Previously, the Philippines’ ecommerce market penetration has been the lowest among Southeast Asia countries. However, forecasts have projected that the country is increasingly seeing a growing demand for consumption and credit accompanied by a 34% average annual 10-year growth.

Singh further adds that, “the World Bank considers credit as 1 of 4 key enablers to drive financial inclusion. The Philippines remains 2 to 5x behind in unsecured consumer loans per capita compared to markets like Indonesia and Malaysia. This is a very positive development for our market!”

eShopaLoan is driven by AsiaKredit’s proprietary algorithmic credit scoring tool that analyzes smartphone behavioral data and other alternative data sources to determine the credit worthiness of an applicant.

To use the eShopaLoan option, users can download the pera247 app and upload a selfie and valid identification, answer a short questionnaire, and grant access to their mobile data to determine their eligibility for a loan.

Approximately within 4 to 5 hours, customers will receive an approval and disbursement will be sent to the assigned Lazada e-wallet. Approval timings will differ on a case-by-case basis and customers are required to place a 20% down payment on their selected purchase.

AsiaKredit’s flagship technology is an algorithmic credit scoring tool that analyses smartphone behavioral data and other alternative data sources to determine credit-worthiness. As part of AsiaKredit’s credit assessment process, its pera247 app extracts a selection of traditional and alternative data points such as behavioral data from an applicant’s smartphone.

Commenting on the deal, chief executive officer of Lazada Philippines Ray Alimurung said that it is a privilege to collaborate with AsiaKredit as both companies work towards a common goal in creating a secure and inclusive digital economy in the Philippines.

“With this partnership, Lazada customers can now have greater flexibility and a variety of payment options when they shop on the platform,” Alimurung added.

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Vivian Foo is a reporter who writes about Southeast Asia’s technology and startup space. The entry point which led her to write about the startup ecosystem was her fascination of the dot-com boom. She is taking a deep dive into how the entrepreneurial mindset works and hopes to share the insights, innovation, and stories of the startups with her readers.