Filipinos Are Spending More Time on Digital Lending Apps, Report Says

There’s nothing surprising about seeing people shifting to digital lending platforms when applying for credit cards is just too much work. (And the chance of getting approved is not so high either.) This is especially true in the Philippines, where most consumers would rather go for micro-loans, or the “buy now, pay later” plans that are all the rage now. According to consumer credit service Digido, Filipinos have been spending more time on digital lending applications.

The study found users have been on these platforms for a whopping 1.3 billion seconds—equivalent to 42 years—in 2023. This means an average borrower spends around 14 minutes per month exploring the credit offerings of a specific app. As expected, personal loans are the usual picks, with 63.4 percent of users spending much of their time to browse related options; followed by point-of-sale offerings (17.5 percent); buy now, pay later services (16.6 percent); and installment loans (2.5 percent).

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“[Duly registered] digital lending applications continue to be viewed as trusted financial partners for persons in need of accessible formal credit, especially the underserved market,” Rose Arreco, business development manager at Digido, said. “The increased use of apps offering personal loans affirm Filipinos’ growing preference for digital channels and flexibility when utilizing credit.”

Not only are Filipinos accessing online loans more frequently, but actual activities done by users of such platforms have gone up by 37 percent last year. This was evident across all 70 licensed digital lending apps analyzed in the report. The number of new or unique users rose by 64 percent to 47.5 million, while those actively using the platforms increased to 7.7 million, up by 25 percent from the previous year. As the report points out, this massive growth is expected to continue—with online lending changing the overall credit market and the financial landscape. 

Partnerships between banks and finance-related platforms or companies have been popping up left and right recently to offer loans to more consumers. The Bangko Sentral ng Pilipinas earlier reported that 44 percent (34.3 million) of Filipinos are still unbanked, which means they are deprived of access to formal lending services. This is despite the fact that personal loans are the highest in demand in terms of credit options, according to Digido.

“The high percentage of Filipinos with limited access to traditional financial services, combined with the growing demand for formal credit options in the current macroeconomic context, led to more consumers turning to various [digital] lending options,” said Arreco. “Such platforms are reaching more low-income segments of the population through new technologies or partnerships with banks.”

Digido is one of the online lending platforms licensed to operate in the Philippines. Boasting a 90-percent approval rate, the company disburses more than 100,000 loans monthly, with zero interest rate for seven days on the first loan.