CIMB extends its low interest loans by 2 billion pesos

Lawrence Agcaoili – The Filipino Star

February 24, 2022 | 00:00

MANILA, Philippines – The local banking arm of Malaysia’s CIMB Group has granted 2 billion pesos to users of its low-interest loan facility that offers instant approval and higher credit limits, adding further momentum towards greater financial inclusion in the country.

Vijay Manoharan, CEO of CIMB Bank Philippines, said the bank has already made significant progress on this front through its personal loan product.

Since its full launch last December, REVI Credit has already issued a total credit limit of over 2 billion pesos to its users.

Its latest credit product and Buy Now Pay Later offers a promising alternative to informal lending sources and even traditional formal credit products. It comes with a host of features that address many issues that borrowers normally face when borrowing from the usual sources.

“One of the biggest barriers to formal credit is demand itself. Banks usually asked for a lot of income and supporting documents, which Filipinos working in the informal sectors do not necessarily have. Not to mention that the evaluation process usually takes time, even weeks, which is not ideal if you need the money to spend now,” Manoharan said.

Under REVI Credit, he explained that the application process is completely digital and takes less than five minutes.

He said the process is even easier for shortlisted users who are not required to submit income documents due to the bank’s alternative credit scoring process.

REVI Credit offers higher credit limits of up to P250,000, interest rates as low as 1%, and customers also don’t need to pay annual fees to maintain their line of credit.

According to a survey conducted by CIMB last December, nearly three out of four or 74% of its personal loan customers are new bank loan customers.

The CIMB strongly supports the efforts of the Bangko Sentral ng Pilipinas (BSP) for stronger financial inclusion in the country.

According to the latest BSP Financial Inclusion Report, approximately 54% of adults with outstanding loans in the Philippines obtained such loans through informal sources such as family, friends or informal lenders.

Cost and inconvenience emerge as the main barriers to accessing formal credit, with BSP reporting that the most cited reasons for individuals’ aversion to borrowing are high interest rates, excessive documentation requirements numerous and the need to provide a guarantee.

In its 2019 financial inclusion report, the central bank reported that more than half of Filipinos who borrowed money did so to meet their basic and essential needs, such as food, house , rentals and utilities.

“Unlike other credit products, which borrowers have limited use of, 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 buy online products with installments through its buy it now, pay later,” added CIMB.

REVI Credit also allows its customers to convert part of their lines of credit into cash or a term loan at any time, giving them more flexibility and making it a good option for emergencies and unforeseen needs.

Established in 2018, CIMB Bank currently serves over 5.2 million Filipinos and over 1 million lending customers.

Stephen V. Lee