Conglomerate JG Summit Holdings Inc. said a unit teamed up with the founders of internet giants Skype and LU.com to form digital financial services marketplace to address the financial needs of underbanked consumers and micro and small and medium enterprises in the Philippines.
JG Summit said in a disclosure to the stock exchange subsidiary Express Holdings Inc. signed a partnership with China-based Oriente to establish technology firm that would enable Filipinos to tap into credit facilities to fund their financial needs.
The joint venture is in the pre-operating and developmental stage and is expected to be launched in early 2018.
“Leveraging its experience building internet giants LU.com and Skype, Oriente is using technology and data science to tap into JG Summit’s resources to enable online peer-to-peer lending and wealth management at attractive interest rates,” said JG Summit president and chief operating officer Lance Gokongwei.
Oriente was established by the co-founders of Skype and Lucom in April 2016 to address a multi-trillion-dollar problem in emerging markets–the lack of affordable credit, even for the salaried middle class.
JG Summit, quoting a World Bank study, said close to 90 percent of adult Filipinos were not covered by a credit bureau and many people resorted to informal means to borrow money.
JG Summit also cited Banko Sentral ng Pilipinas’ data that out of the 43 percent of the population who saved money, only 14 percent of households maintained a deposit account and 68 percent kept their savings in unsecured places.
Hubert Tai, chief executive of Oriente and co-founder of LU.com, said the partnership with JG Summit aimed to create a digital infrastructure and social ecosystem to fuel financial inclusion, enabling credit and wealth accumulation.
LU.com is one of the highest valued fintech startups ($18.5 billion) and boasts an active customer base exceeding 7 million and annual transaction volume of $800 billion.
Geoffrey Prentice, a co-founder of Oriente and Skype, said Oriente addresses a pressing social need by providing a superior option to informal lending.
“Skype empowered affordable communications; in a similar manner, our partnership will empower Filipinos to access affordable credit by leveraging the latest technology,” Prentice said.
Skype is one of the largest technology startups in Europe and now makes up 40 percent of all international voice traffic.