by Jan Michael Carpo, Reporter
GCash, the Philippines’ leading digital wallet, showcased its innovative approach to empowering micro, small and medium-scale enterprises (MSMEs) by providing accessible and fair credit to underserved Filipino entrepreneurs at the “2024 Singapore FinTech Festival.”
From market vendors to small furniture makers, GCash’s digital platform is making financial services more inclusive, particularly for those who are excluded from traditional banking systems.
GCash President and CEO Martha Sazon, alongside an esteemed panel of global financial leaders, participated in a discussion titled “Safeguarding the Economy’s Backbone: Accelerating Global SME Financing through Digital Services.”
The panel highlighted the critical role of digital services in bridging financing gaps for Micro, Small, and Medium Enterprises (MSMEs), not only in the Philippines but across the globe. The event also brought together notable figures including Mahendra Nerurkar, VP of Payments for Amazon’s Emerging Markets, Doug Feagin, President of Ant International, and Paula Ingabire, Rwanda’s Minister of ICT and Innovation.
Martha Sazon (left) with Sen. Chiz Escudero and brand ambassador Heart Evangelista
During the discussion, Sazon emphasized the importance of accessible and fair lending as a cornerstone for inclusive economic growth. “Increasing access to fair financing is the best thing we can do for MSMEs. Fair credit availability is essential for financial inclusion, particularly for small business owners who often face high risks and limited opportunities,” she said.
Sazon also underscored that the digital transformation enabled by platforms like GCash is key to giving Filipino entrepreneurs a fighting chance against exploitative lending practices, such as loan sharks, which remain prevalent in the country.
GCash and the power of its digital lending platform
GCash has made significant strides in democratizing access to financial services through its in-house credit scoring system, GScore.
This system uses digital trust assessment to evaluate potential borrowers quickly, removing the need for lengthy paperwork or collateral, which are typically required by traditional banks. With just a few taps on the GCash app, users can apply for loans, get approved, and access funds in a matter of minutes—without the usual bureaucratic hurdles.
Through its lending subsidiary, Fuse, GCash has provided over PHP 155 billion in loans to 5.4 million borrowers. A large portion of these borrowers — two-thirds — are women or individuals from lower-income groups, with many living outside of Metro Manila.
Notably, these loans are helping to reduce the reliance on informal lenders, which have historically charged exploitative interest rates and preyed on the financially vulnerable.
“By leveraging our app and digital infrastructure, we’ve been able to help Filipinos, particularly those in rural areas and marginalized sectors, access the credit they need to build their businesses,” Sazon explained.
“Many people who previously had no access to formal credit are now able to take out loans with fair interest rates, empowering them to grow their businesses and improve their livelihoods,” she added.
Addressing barriers to financial inclusion
According to the Bangko Sentral ng Pilipinas (BSP), around 45% of Filipinos are unable to access formal credit due to financial barriers, such as the inability to open bank accounts, a lack of documentation, or the distance to financial institutions.
The BSP also noted that traditional banking processes often intimidate borrowers, further excluding them from the financial system. These factors have left many small business owners and entrepreneurs reliant on informal, high-risk lending sources.
GCash’s digital services are directly addressing these challenges by offering a more convenient, secure, and inclusive alternative. The rise of digital wallets in the Philippines has been transformative: GCash’s user base has grown from pre-pandemic levels to over 90 million active users as of 2023, making it the first and only Philippine unicorn valued at $5 billion.
The company’s approach aligns with the BSP’s goal to increase the share of agricultural and MSME loans to 10% by 2028, up from just 1% in 2021. By providing affordable and accessible credit, GCash is playing a crucial role in advancing financial inclusion and supporting the growth of the Philippine economy.
GCash’s achievements were showcased on the global stage at SFF 2024, where thousands of fintech innovators and entrepreneurs gathered to share ideas and foster partnerships. With its mission to revolutionize digital finance, GCash’s participation underscored its leadership in the fintech space, particularly in empowering small businesses and fostering financial inclusivity.
As the digital financial landscape continues to evolve, GCash remains at the forefront of providing sustainable and accessible financial solutions to Filipino MSMEs, positioning itself as a key player in the global movement to drive inclusive economic growth through fintech innovation.