According to the analysts of the international financial group UnaFinancial, neobanks in the Philippines will serve 51.4 million customers by 2025. At the same time, their cumulative loan portfolio will amount to $15 billion and the number of active deposit accounts will reach 10 million.
The audience of neobanks includes the entire population of the country aged 20-64. According to the data, there will be about 65.7 million (56.2%) people of this age in the Philippines in 2025. By this time, the population will have nearly 100% access to the Internet and mobile connection, so the technological restrictions on the use of fintech services have not been taken into account.
In the study, the following groups were subtracted from the total of 65.7 million: low-income and unemployed population (-3.9 million), high-income citizens with little interest in financial services (-3.2 million), loyal customers of traditional financial institutions (-3.0 million), citizens with low technological literacy (-0.7 million), population with low interest in financial services (for instance, due to low financial literacy, -2.0 million), other irrelevant categories (-1.5 million). As a result, the target audience was reduced to 51.4 million potential clients, who make up almost half of the country’s population. This figure correlates with the number of adult Filipinos (51.2 million) who remain unbanked.
At the same time, there is a growing share of consumer loans in the country’s economy. The big demand for borrowings, the economic stabilization and the development of neobanking will lay the foundation for a long-term digital transformation of the financial sector in the Philippines. The expansion of the neobank industry may increase the share of consumer loans to GDP to 12-15% in 2025. The rapid inclusion of the population from non-capital regions and the gradual growth of their incomes will allow the market to reach $15 billion, which is a 20% share in the total volume of consumer loans in the Philippines. In terms of deposits, with more attractive conditions, neobanks will easily get clients from traditional banks, gaining 10 million active accounts in the next 5 years. These estimates suggest active inclusion of the young tech-savvy generation as well.
Sergey Sedov, Chief Executive Officer of UnaFinancial, commented: “Certainly, it will take time to realize the neobanks’ customer potential in the Philippines, but in the next one or two years, there will be millions of real clients. For instance, today, at least 8 million of such citizens live in 500 cities that are not covered by bank branches. This population, as well as people from other segments including informal workers, youth and applicants rejected by banks, will provide a sufficient basis for the rapid growth of neobanks in the Philippines.”
Headquartered in Singapore, UnaFinancial is a group of companies, which provides fintech services in 8 markets of Europe and Asia. Founded by entrepreneur Sergey Sedov in 2013, the group focuses on micro-consumer lending, marketplace funding and development of software. All products of the group are built completely in-house using artificial intelligence, machine learning and data-driven technologies to provide precise and comprehensive risk management, comfort and speed for customers and efficiency for business. For the time of operation, the group has served more than 11 million customers and provided financing in the amount of 800 million USD.