Bizbaz, a Singapore-based fintech solution provider, has announced its partnership with RCBC, a national retail bank in the Philippines. This partnership will involve RCBC piloting Bizbaz’s artificial intelligence-driven credit assessment and scoring tool to broaden access to loans, especially among micro, small, and medium enterprises (MSMEs) as well as unbanked and underbanked communities.
Notably, loan accessibility is one of the key challenges faced in the Philippines, where 78% of its bankable population remains either unbanked or underbanked, placing the nation among the world’s top ten countries in terms of the unbanked population size.
“Most banks in Asia [rely] on financial history-based credit risk system. For MSMEs, this translates to access to a credit lifeline that would otherwise be unattainable,” said Hayk Hakobyan, co-founder and CEO of Bizbaz.
The initiative will also aim to reduce risks related to non-performing loans (NPLs) by striving to offer improved predictability assessments. Southeast Asia has seen a steady rise in NPLs in recent years, and, according to a statement by Bizbaz, the World Bank has projected an increase in the region’s NPL ratio from 5.7% in 2022 to 5.9% this year. Both figures surpass the global average of 4.2% by a significant margin. As per Bizbaz’s statement, Southeast Asia incurs losses that add up to USD 50 billion every year due to NPLs.
Bizbaz creates customer and business risk profiles by analyzing financials, health, lifestyle, and social footprints. Using personality-based and voice-based risk assessments, Bizbaz determines loan suitability, resulting in a more accurate and comprehensive credit scoring system that incorporates a broader array of data, including alternative sources.
Bizbaz’s process enables faster and more efficient credit scoring, reducing the time borrowers wait for loan approval and mitigating bank default risks. Its current clients, including an Indonesia-based national bank, have seen their revenue increase two to three times while reducing customer acquisition costs and bad debt defaults by up to 40% and 50%, respectively.
“With BizBaz, we can maximize AI’s massive potential and unlock more opportunities for our countrymen, especially the MSMEs,” said Eugene Sering Acevedo, president and CEO of RCBC.