Southeast Asia’s first digital pawn shop PawnHero has closed a $9.7 million (P500 million) financing deal with a Philippine investment bank even as it signed a partnership agreement with the fintech arm of telco giant PLDT.
PawnHero chairman and founder David Margendorff declined to name the investment bank but said “the credit line agreement will allow PawnHero to grow its loan book and service more customers.”
In a separate business development, the startup company signed an agreement with FINTQ, the financial technology arm of PLDT and Smart’s Voyager Innovations.
FINTQ runs Lendr, the country’s first online marketplace platform for consumer loans. Upon integration, PawnHero will be the first digital pawnshop service to be available in the Lendr marketplace.
FINTQ managing director Lito Villanueva said, “pawnshops are ubiquitous among Filipinos as a source of accessible, fast secured short term credit.”
“PawnHero has led innovations in this space by fully going digital and we’re excited to see them as part of the Lendr marketplace,” he said.
Registered with the Philippine central bank or Banko Sentral ng Pilipinas, PawnHero was launched in early 2015 with the goal to expand access to affordable financial services to unbanked and underbanked Filipinos.
“With the service we provide we are not just helping the immediate financial needs of the average citizen, but we are also making them aware of the positive effect of being in a financially included state,” Margendorff said.
He noted financial inclusion in the Philippines has improved a lot with more startups in the fintech field popping up.
“This is a clear and positive indication that the country is on its way to becoming more developed in digital finance as compared to a few years ago,” Margendorff said. “As one of the fastest growing economies in the world, the potential here is almost endless. However, a lot of work needs to be done to reach a state of financial inclusion which encompasses the majority of Filipinos.”
The Lendr platform reportedly covers 100 per cent of 81 provinces, 90 per cent of 145 cities, and 15 per cent of 1,490 municipalities in the Philippines.
Approximately 23 per cent of borrowers in Lendr are from low-income areas. So far, Lendr has disbursed more than P23 billion in loans to more than 200,000 clients since its launch in 2015, registering annual growth rates of 50 per cent and 33 per cent in loans released and number of borrowers, respectively.