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RCBC, HSBC-backed Bizbaz partner to provide more accessible credit for MSMEs

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(In photo: From Left to Right: RCBC Digital Enterprise and Innovations Group – Digital Loans & Business Development Head Jose Carlo Eufemio; RCBC Executive Vice President and Chief Innovation and Inclusion Officer Mr. Lito Villanueva; Bizbaz Co-founder and Chief Business Development Officer Mr. Vincent Choy, and Orytiv Ventures Partner Jonathan Nguyen during the signing of the Memorandum of Understanding at the Singapore Fintech Festival 2023.)

Fastest growing and multi-awarded digital challenger bank Rizal Commercial Banking Corporation (RCBC) and Bizbaz, a Singapore-based AI-powered credit scoring and risk models assessment solutions provider, announced their partnership to make credit options more accessible for entrepreneurs in the Philippines.

RCBC will leverage Bizbaz’s AI-driven credit assessment and scoring tool to evaluate the eligibility of micro, small, and medium enterprises in unbanked and underserved communities in the Philippines. The two institutions hope that through the use of innovative technology to model the credit-worthiness of target clients, it can reduce non-performing loan (NPL) risks.
According to the Department of Trade and Industry, mSMEs make up 99.59% of the total number of businesses operating in the country, which the partnership aims to tap and empower. Meanwhile, the International Finance Corporation highlighted that the global funding gap for mSMEs is estimated to be at US$5.2 billion in developing countries such as the Philippines.

“The current credit system is broken, with most banks in Asia relying on financial history-based credit risk systems. With most of the Asian population not even having a credit score, the current system is obsolete. There needs to be an alternative that can harness the latest AI technology and behavioral science data available,” said Hayk Hakobyan, CEO and co-founder of Bizbaz.

“For mSMEs, this translates to access to a credit lifeline that would otherwise be unattainable. For banks like RCBC, this aligns with their commitment to financial inclusion and innovation, increasing predictability, reducing NPL risks, and leading to long-term cost savings,” added Hakobyan.

The World Bank projected that the NPL ratio in Southeast Asia would increase from 5.7% in 2022 to 5.9% in 2023, above the global average of 4.2%. The Philippines has a recorded NPL of 4.2%. For the World Bank, this translates into an annual loss of US$50 billion.

RCBC expressed its enthusiasm through its leaders. The Head of the Data Science and Analytics and the Chief Credit Officer both shared their optimism for the credit sector with the launch of the partnership.

“We are looking forward to testing and learning using alternative and radical data points for predictive AI scoring. This will allow the bank to know our MSMEs deeply and be able to aid them with their capitalization needs; whilst balancing the risks,” RCBC Group Head of Data Science and Analytics Ma. Pamela Katrina Cadudoy said.

“RCBC has been exploring the use of AI-based scoring for MSMEs. A challenging market due to lack of traditional data, the use of AI would allow us to access thousands of non-traditional data that would give insights on potential MSMEs propensity and ability to pay,” Bennett Clarence Santiago, RCBC Chief Credit Officer shared.

RCBC has been exploring the use of AI to make credit available to mSMEs. The bank’s executives expressed their excitement in the partnership as an important addition to their current initiatives to make finance more relevant and life-enabling to a wider group of Filipinos.

“We are thrilled to announce our strategic collaboration with Bizbaz, making a significant leap forward in our commitment to financial inclusion in the Philippines. We believe that by integrating AI into our credit score assessment process, we are not just innovating; we are pioneering a path towards greater access and opportunity for mSMEs,” Lito Villanueva, Executive Vice President and Chief Innovation and Inclusion Officer of RCBC, said.

“RCBC strives to be at the forefront of emerging technologies and data-driven innovations. With this partnership with BizBaz, we can maximize AI’s massive potential and unlock more opportunities for our countrymen, especially the MSMEs,” Eugene S. Acevedo, RCBC President and CEO, said.

Bizbaz provides a comprehensive credit scoring system by evaluating the profiles of their potential clients and leveraging the AI-technology. Through its disruptive approach in analyzing consumer profiles, it generates a more accurate and efficient credit-scoring system that includes alternative sources of data. It has previously received US$4 million investment from HSBC Asset Management.

RCBC received numerous global, regional and national recognitions for its pioneering services including Best Bank for Digital for four consecutive years from Asiamoney including accolades from Gartner, YouTube, The Asian Banker, and Bankers Institute of the Philippines (BAIPHIL) among others. The bank employs AI-powered technologies in one of its leading digital services – RCBC Pulz. RCBC’s commitment to customer service excellence by investing in innovation and technology to make finance accessible has earned itself the top rank in the Philippine Best Customer Service Survey by Philippine Daily Inquirer and Statista.

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