Express Holdings Inc, a unit of Philippine diversified conglomerate JG Summit Holdings Inc (JGSH), has formed a financial technology (fintech) joint venture with China-based Oriente, to address the underbanked consumers and small businesses in the country.
The joint venture, Oriente-Express, is setting up a digital financial services marketplace that will enable unbanked and underbanked Filipinos to tap into credit facilities.
The joint venture is in the pre-operating and developmental stage, and is expected to launch in early 2018.
Headquartered in Greater China, Oriente was founded in April 2016 by co-founders of Skype and LU.com to address a multi-trillion-dollar problem in emerging markets – the lack of affordable credit, even for the salaried middle class.
JGSH president and COO Lance Gokongwei, said “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 rate.”
Quoting the World Bank, JGSH noted close to 90 per cent of adult Filipinos are not covered by a credit bureau and many people resort to informal means to borrow money.
“In addition, according to the Banko Sentral ng Pilipinas, of the 43 per cent of the population who save money, only 14 per cent of households maintain a deposit account and 68 per cent keep their savings in unsecured places,” JGSH said in its statement.
JGSH is one of the largest and most diversified conglomerates in the Philippines engaged in food and beverage, banking, airline, real estate, petrochemical, among others.
Oriente CEO and LU.com co-founder Hubert Tai, said they aim to create a digital infrastructure and social ecosystem to fuel financial inclusion, enabling credit and wealth accumulation.
Globally, LU.com is one of the highest valued fintech startups pegged at $18.5 billion, and boasts an active customer base exceeding seven million and annual transaction volume of $800 billion.
Meanwhile, Oriente and Skype co-founder Geoffrey Prentice, 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 notably one of the largest technology startups in Europe to date, and now makes up 40 per cent of all international voice traffic.