DEMAND for credit has increased significantly so far this year and is expected to further improve, the top official of TransUnion Philippines said.
“We’re not seeing the uncertainty, what we’re actually seeing is market recovery. The demand has increased, so much so that it’s even higher than pre-pandemic levels,” Pia L. Arellano, president and chief executive officer of TransUnion Philippines, said at a briefing on Tuesday.
“We haven’t penetrated the entire lending industry, we’ve barely scratched the surface,” she said. “There’s so much that we can still do, so much growth for the industry.”
Data from TransUnion showed that demand for credit increased by 89% in the first half of the year.
“Filipinos still have a very negative perception of credit. What we want to do is try to change that perception because ultimately credit is not bad as long as you’re responsible,” Ms. Arellano said.
TransUnion Chief Commercial Officer Yogesh Daware said that there has also been more demand across various credit products.
“The good news is this is only further accelerated. We don’t see evidence in terms of any slowdown in any product,” he added.
Mr. Daware noted that the country’s young demographic will be among the drivers for credit demand in the coming years.
“We have one of the youngest populations in the world, this is a population raring to go. There’s an aspiration to live a better lifestyle,” he said.
Meanwhile, Ms. Arellano noted that there is still much to be done in terms of improving credit perception.
“A lot of education still has to be done to talk about credit. From a supply side, our role is to influence lenders and banks, to lend more [and] be less risk-averse,” she said, adding that doing so will drive financial inclusion.
“Our solutions and insights allow them to say yes to more Filipinos,” she added.
The preference for e-wallet platforms is also not seen impacting the promotion of credit.
“We don’t see it dampening credit. It’s the first entry into financial management and then inspiring (them) to take on more credit,” she added.
According to TransUnion’s Credit Perception Index (CPI) study released earlier this year, 69% of Filipinos surveyed had a “general understanding” of credit concepts but still preferred to use cash and e-wallets over these products.
Among credit products, Filipino respondents were found to be most familiar with installment payments (83%) and were least knowledgeable about overdraft protection (25%).
They likewise favored installment loans (81%), followed by personal loans (76%), “buy now, pay later” products (71%), and credit cards (67%).
The study also showed that the majority of respondents believe users of credit products are risk-takers in their finances. — Luisa Maria Jacinta C. Jocson