The financial industry is waiting for government to implement the national identification system to help grow its businesses, including in the countryside like the unserved areas of Mindanao.
Mindanao has remained to be a growth potential for the industry, including the credit card business, because of a very low penetration, but the implementation of the identification program will help companies validate the credit capability of applicants, said Francis Ramon L. Tioseco, first vice president of the Metrobank Card Corp. (MCC), the credit card arm of the Metropolitan Bank and Trust Co. (MBTC).
Tioseco, whose group was in town for the launching of the NCCC (New City Commercial Corp.) Credit Card, the first of such card for the company in the country, told TIMES that the national identification system and the establishment of the credit bureau will help companies like his to fast-track the review of the applications.
“One of the things that we wanna be able to do is to tap the unbanked, and hopefully credit card is one of the products that we can provide to more individuals especially in Mindanao,” he said even as he projected that the credit card usage for the island will increase by 20% by the end of the year compared to last year, although he did not provide the actual number..
A credit bureau is an agency that provides reports and ratings on credit facilities as well as other aspects of borrowing, something that the country still does not have, said Tioseco.
The Credit Information Corp., two years ago, approved the application of six companies, five of them foreign, to set up their respective credit bureaus.
On Mindanao as a potential area for credit card growth, Jocelyn Lim-Bata, MCC senior vice president for credit card sales, said that it has all the qualities of a growth area.
“We first need to understand if it is serviceable, so, obviously the level of economy that exists in that area because that creates the demand and the need for the product,” said Lim-Bata.
Other factors necessary in identifying a potential growth area also include the presence of the merchants willing to partner with the credit card company, the payment facilities and the ability to deliver the cards.
The good thing, added Tioseco, the bank has “a strong presence” in Mindanao to provide customers easier way both to settle their accounts and to apply for credit card, making the growth of the business more sustainable.
On its partnership with NCCC, Tioseco said the credit card is giving the homegrown retailer a wider flexibility in managing its finances.”
“It is safer for them (in handling their finances) and that they do not even have to pay too much for cash management and it becomes more ‘auditable’,” he added, pointing out that all transactions are done digitally.
Joseph G. Uy, chief information officer of the LTS Pinnacle Holdings Inc., subsidiary of the NCCC, told TIMESthat the target of the company is to enroll about 50,000 loyal customers of the retailer before the end of 2020.
Of the target number, Uy believed the “sizeable” number would come from the 275,000 NCCC Rewards Card holders, or the Ka Negosyo customers.
This is because, it is easier for them to apply for a credit card because the value that they buy from the stores of the company can be easily computed, providing the credit card company with a basis to grant them credit.
“The good thing, and this makes the product more attractive, is that the banking industry is secured and it is hard to steal the account. Another good thing is that they can even go online buying,” he explained, pointing out that the the credit card, just like any credit card, can be used in all establishments that are partners of the credit card company and Mastercard, its international partner.