Thailand
Now Cambodians avail loan through ‘mobile chat’ tech
Get a loan sanctioned within a few hours, sometimes in minutes, and that too on the basis of an application you place through a mobile chat sitting at home! Well, this is already happening in Cambodia and some microfinance institutions (MFIs) have embraced the fast-developing financial technology to make this possible.
Cambodia-based Boost Capital, a pioneer of the technology in the country, told Khmer Times recently that a survey by it found that 99.8 percent of the customers who availed these digital loans through chats preferred to have their next loan also using the same method.
Hassle-free small loans have a huge market in Southeast Asia, and in Cambodia growing financial literacy has also helped a lot in the development of digital loans, said Boost Capital founders Lucinda Revell and Gordon Peters. The start-up was recently selected by the renowned entrepreneurial community Iterative Ventures, formed by former Facebook employees, for investment and incubation.
The success of the tech, which is used by MFIs such as AMK and Chamroeun to offer chat-based financial services to Cambodian customers, shows how Cambodia is a perfect sandbox for cutting-edge tech development, the two founders said.
According to them, the high smartphone prevalence put Cambodia at the forefront of new fintech offerings. “The role of a well-developed Credit Bureau of Cambodia and a great regulator like the National Bank of Cambodia has also helped a lot in the rapid development of fintech in the country,” the duo added.
The start-up was selected by Mastercard as one of the winners of its Strive Community innovation awards last year for its contribution to developing a low-risk digital loan market in the Kingdom.
Launched in Cambodia in 2018, Boost Capital has since then helped partner financial institutions to disperse credit worth over $3 million to small businesses, said Gordon Peters.
The loanees are selected on the basis of their applications sent over as chats on digital platforms such as Messenger, Telegram or WhatsApp. “Most digital loan applications now can be filled out in 5-10 minutes to find out what loan size the applicant qualifies for, and this is also dependent on our Financial Institution partners underwriting,” he said, adding that non-payment risk has remained low so far.
Peters added that the majority of clients are women-led businesses using loans for business growth purposes. “Enabling a loan anytime and anywhere is our motto (since Boost enables digital loans but our bank partners provide them),” he said.
The ceiling of the loans would depend on the partner financial institutions, he added, while saying that since January last year, there has been a 400 percent growth in applications.
Regarding the tie-up with Iterative, Lucinda said it invested $500,000 into Boost “when we were selected to be in this cohort of tech companies they are working with.” Boost, which also has a presence in Singapore, was selected from over 750 applicants across the world for the 2023 winter cohort.
In Cambodia, the company, which employs 28 people, has processed around 500,000 loan applications so far and enabled financial partners to disburse over $3 million in loans. Lucinda said the company is now planning to expand further in Southeast Asia and the Philippines and Indonesia are the potential markets.
Tomas Pokorny, Secretary General of Cambodia Association of Finance and Technology (CAFT), meanwhile, told Khmer Times that digital lending is one of the core pillars of a developing economy and Cambodia still needs a big amount of investment for the full development of the sector.
Source: https://www.khmertimeskh.com/501247709/now-cambodians-avail-loan-through-mobile-chat-tech/