CREDIT INFORMATION Corp.’s (CIC) database now has 66 million borrowers and 413 million tradelines at end-July, driven by the growth in loans, especially those offered via financial technology (fintech) platforms such as buy now, pay later (BNPL) products.
This is up from the 62 million unique individuals and 298 million tradelines recorded at end-2024. Tradelines refer to accounts included in credit reports, which include credit cards and installment and non-installment loans.
“BNPL has outpaced all of the other products that we normally would gravitate towards, but now this has grown faster than the rest of them. Really, this growth has been driven mostly by our fintech partners,” CIBI Information, Inc. Chief Analytics Officer John Harley Chan said at an event on Tuesday.
State-run CIC manages the public credit registry that acts as the central repository of credit information, receiving and collating data from entities like banks, quasi-banks, investment houses, cooperatives, micro-financing organizations, credit card companies, insurance firms, and government lending institutions.
Authorized financial institutions can also access borrowers’ credit reports via accredited credit bureaus. CIBI is one of three credit bureaus accredited by the CIC.
Short-term borrowings of below P100,000 had a market share 15% in 2024, CIC data showed.
Meanwhile, loans with tenors below six months, which Mr. Chan said is where most BNPL loans fall under, had a 28% market share last year from 14% in 2021.
“These numbers underscore the reality that the cost-consumer behavior has really shifted towards high-frequency small ticket loans,” he said.
CIC data also showed that personal loan and BNPL bookings rose by 16% year on year to P853 billion in 2024. Mortgage bookings and auto loan bookings also went up by 2.3% and 10% to P183 billion and P247 billion, respectively.
Meanwhile, new credit card bookings declined by 6.6% to P519 billion last year.
However, CIBI noted high delinquency rates among online lending platforms, which provide quick cash releases via cash loans.
“Effectively, our fintech partners have digitized what we used to fondly call as 5-6. So of course, I know that for our banking partners, this particular segment has always been viewed as high risk. To some, they would completely avoid it. To others, they would test it from time to time. And we’re not ignoring that reality,” Mr. Chan said.
“The delinquency rates that we see in this segment are really high. It’s double-digit across the board.”
CIC data showed that the delinquency rate of borrowers who’ve never availed of these cash loan products in the last 12 months is at 12%.
However, this would double to at least 30% once they avail of cash loans.
Delinquency rates also increase depending on the size and term of the loans taken out, CIBI said. — AMCS
