Netbank and UBX have recently partnered to extend loans to small and medium-sized businesses (SMBs) that sell their products through digital commerce platforms in the Philippines. Recognizing the need for additional working capital to support sales expansion, Netbank aims to rapidly expand its lending to e-commerce sellers in the coming year. While other banks may hesitate due to the lack of collateral, Netbank leverages UBX’s lending platform SeekCap to gather comprehensive information on sellers, including their sales and performance records on the e-commerce platforms. With a range of virtual account and payment tools at its disposal, Netbank ensures that these loans are self-liquidating, thereby minimizing credit risks and offering e-commerce sellers loans with notably lower costs than other lenders. Co-founder of Netbank, Gus Poston, expressed enthusiasm for the partnership with UBX, emphasizing their focus on supporting businesses driving the new economy and helping small and micro enterprises across the country grow.
This collaboration between Netbank and UBX marks another milestone in their partnership, with Netbank already providing payment and account services to UBX. This extends the expansion of open/embedded finance in the Philippines, aligning with Netbank’s mission of providing high-quality financial services to individuals and companies fueling growth in the country. UBX’s Business Lead for Lending, Mario Jordan Fetalino, highlighted the importance of serving underserved micro, small, and medium-sized enterprises (MSMEs) in the Philippines. Fetalino emphasized how SeekCap has made financing more inclusive through advances in technology and innovative methods. The partnership between Netbank and UBX further contributes to their shared goal of making safe, secure, and affordable financing easily accessible to e-commerce sellers. Netbank plans to expand its lending to sellers on multiple platforms, striving to offer a comprehensive range of financial services to support the burgeoning Filipino economy.
Netbank and UBX to Extend Loans to SMBs Selling via Digital Commerce Platforms
Overview
In a bid to support small and medium-sized businesses (SMBs) operating on digital commerce platforms, Netbank and UBX have recently signed an agreement to extend loans to these sellers. Netbank, as a financial institution, recognizes the importance of providing additional working capital to SMBs in order to help them expand their sales and grow their businesses. Unfortunately, many banks are apprehensive about working with these sellers due to the absence of collateral. However, Netbank, in collaboration with UBX’s lending platform SeekCap, has found a solution to this predicament. By leveraging detailed information gathered on the sellers’ sales and performance records from the e-commerce platforms, Netbank is able to conduct a thorough underwriting process. Additionally, Netbank’s development of virtual account and payment tools ensures that these loans are “self-liquidating,” thereby reducing credit risk. With this innovative approach, Netbank can provide e-commerce sellers with loans at significantly lower costs compared to other lenders.
Importance of Loans for SMBs on E-commerce Platforms
Small and medium-sized businesses are the driving force behind the new economy, particularly on digital commerce platforms. These platforms provide opportunities for growth and expansion for SMBs, allowing them to reach a wider customer base and increase their sales. However, in order to take full advantage of the e-commerce platforms, these businesses often require additional working capital. Loans play a crucial role in providing SMBs with the necessary funds to invest in inventory, scale their operations, and meet the growing demands of their customers. Access to loans is therefore essential for the success and sustainability of these businesses.
Current Challenges Faced by SMBs in Accessing Loans
While loans are vital for SMBs on e-commerce platforms, obtaining them can be a daunting task. Traditional banks and financial institutions often hesitate to provide loans to these sellers due to the lack of collateral. SMBs, especially those operating solely on digital platforms, may not possess the physical assets usually required as collateral by banks. This poses a significant challenge for sellers who have the potential for growth and need financial support to fuel their expansion. However, with the collaboration between Netbank and UBX, this challenge is being addressed, revolutionizing the lending landscape for SMBs.
The Role of Netbank and UBX
Netbank, as the first embedded finance/BAAS provider in Southeast Asia, is at the forefront of driving financial inclusion and innovation. With its banking license, Netbank offers white-labeled banking services to Filipino Fintechs, enabling them to reduce costs and accelerate their growth. Recognizing the potential of e-commerce platforms, Netbank is partnering with UBX, a subsidiary of Union Bank of the Philippines, to extend loans to SMBs selling via digital commerce platforms. UBX, through its lending platform SeekCap, specializes in making financing more inclusive by leveraging new technology and innovative methods. By combining their expertise and resources, Netbank and UBX aim to provide safe, secure, and affordable financing options for SMBs, ensuring their growth and success on e-commerce platforms.
Partnership Agreement and Loan Issuance
The partnership agreement between Netbank and UBX marks the beginning of an exciting journey to empower SMBs on digital commerce platforms. With the agreement in place, Netbank has already started issuing loans to eligible sellers. The collaboration enables Netbank to gather detailed information on the sellers, including their sales and performance records on the e-commerce platforms. This data forms the foundation of the underwriting process, allowing Netbank to assess the creditworthiness of the sellers and make informed decisions regarding loan issuance. By leveraging UBX’s lending platform SeekCap, Netbank can streamline the loan application process and provide efficient services to SMBs.
Advantages of Working with UBX’s Lending Platform SeekCap
UBX’s lending platform SeekCap brings a multitude of advantages to the table for SMBs seeking loans on digital commerce platforms. SeekCap utilizes innovative technology and methods to make financing more inclusive, ensuring that underserved SMBs have access to affordable financing options. Through SeekCap, Netbank can leverage the platform’s capabilities to gather detailed information on sellers and assess their creditworthiness accurately. This allows for a streamlined underwriting process, reducing the time and effort required for loan approvals. SeekCap’s advanced technology also enables Netbank to offer e-commerce sellers loans at considerably lower costs compared to other lenders, making it an attractive option for SMBs on digital commerce platforms.
Detailed Information Gathering for Underwriting Process
In order to make informed decisions regarding loan issuance, Netbank relies on detailed information gathered on the sellers. This includes sales and performance records of the sellers on e-commerce platforms. By analyzing this data, Netbank can assess the creditworthiness of the sellers and make accurate predictions regarding loan repayment capabilities. The comprehensive underwriting process ensures that only eligible sellers receive loans, minimizing the risk for both Netbank and the sellers. By incorporating robust data analytics and evaluation methods, Netbank ensures that loans are issued to sellers who have the potential for growth and are capable of managing their financial obligations responsibly.
Utilizing Virtual Account and Payment Tools
Netbank’s development of virtual account and payment tools enhances the loan issuance process for SMBs on digital commerce platforms. These tools enable Netbank to ensure that the loans are “self-liquidating,” meaning that the loan payments are collected directly from the seller’s sales made on the e-commerce platforms. By linking the loan repayment process to the sellers’ sales, Netbank mitigates credit risk and reduces the burden of repayment for the sellers. This innovative approach not only simplifies the loan repayment process but also provides sellers with a flexible and convenient method of managing their financial obligations.
Lower Cost Loan Offerings for E-commerce Sellers
One of the primary advantages of collaborating with Netbank and UBX’s lending platform SeekCap is the significantly lower cost of loans for e-commerce sellers. Traditional lenders often have higher overhead costs and strict collateral requirements, resulting in expensive loan offerings. In contrast, Netbank’s partnership with UBX and the utilization of SeekCap streamline the lending process, reducing administrative costs and enabling lower interest rates. This cost-effective approach ensures that SMBs on digital commerce platforms have access to affordable financing options, supporting their growth and enabling them to seize the opportunities presented by e-commerce platforms.
Netbank’s Partnership with UBX for Other Services
Netbank’s partnership with UBX goes beyond loan issuance for SMBs on digital commerce platforms. In addition to providing loans, Netbank is also offering a range of payment and account services to UBX. This collaboration accelerates the expansion of open/embedded finance in the Philippines, facilitating high-quality financial services for individuals and companies that are driving growth in the country. By combining their expertise and resources, Netbank and UBX are paving the way for financial inclusion and innovation, addressing the diverse needs of the Filipino economy.
The Significance of Serving MSMEs in the Philippines
Micro, small, and medium enterprises (MSMEs) form the majority of businesses in the Philippines. These enterprises play a critical role in driving economic growth, generating employment opportunities, and fostering innovation. However, a significant portion of MSMEs still remain underserved, lacking access to affordable financial services. Netbank and UBX’s partnership aims to bridge this gap by extending loans to SMBs on digital commerce platforms. By providing MSMEs with the necessary working capital, Netbank and UBX empower these businesses to expand their operations, create more jobs, and contribute to the overall development of the Philippine economy.
Advancements in Financing Inclusion through SeekCap
UBX’s lending platform SeekCap is at the forefront of advancing financing inclusion in the Philippines. SeekCap leverages technology and innovative methods to make financing more accessible and affordable for underserved SMBs. By partnering with Netbank, SeekCap expands its reach to SMBs on digital commerce platforms, helping them access the capital they need to thrive. SeekCap’s advanced data analytics and evaluation methods enable a comprehensive understanding of sellers’ creditworthiness, ensuring that loans are issued to those with the potential for growth. Through SeekCap, Netbank and UBX are making significant strides in enhancing financing inclusion and empowering MSMEs in the Philippines.
Future Expansion of Netbank’s Lending Program
Netbank’s collaboration with UBX marks the beginning of an exciting endeavor to extend loans to SMBs on digital commerce platforms. As Netbank gains momentum and successfully supports SMBs in their growth journey, the institution aims to expand its lending program to encompass sellers on multiple other platforms. By providing a complete package of financial services to the new Filipino economy, Netbank strives to become a trusted partner for SMBs, offering the tools and resources they need to thrive in the digital age.
In conclusion, the partnership between Netbank and UBX represents a significant milestone in supporting SMBs on digital commerce platforms in the Philippines. By extending loans to sellers and utilizing innovative technology, Netbank is revolutionizing the lending landscape to provide affordable financing options. Through this strategic collaboration, SMBs have access to the necessary working capital to expand their operations and seize opportunities for growth. Netbank’s commitment to empowering MSMEs and UBX’s dedication to advancing financing inclusion pave the way for a more prosperous and inclusive economy in the Philippines.
