The impact of the COVID-19 pandemic and the strong technology development have shifted the financial transaction behavior of Filipinos to online forms, especially online loans. Online loans in the Philippines have been trusted by many people and become a familiar financial solution for urgent needs. However, despite the robust development, potential challenges and risks still emerged in the market.
An analytical report in January 2023 by Digido - digital finance company indicates that the use of online lending applications on Android and iOS in the Philippines increased in 2022, and the time spent on these financial applications significantly increased compared to 2021.
In particular, according to Digido, there were a total of 14.2 million downloads of financial applications as of the end of December 2022. The downloads of online loan applications in the Philippines increased by 3.7 million compared to the figure in December, 2021. (Source)
Online loan market in the Philippines grows drastically
The growth of the online loan market in the Philippines is mostly driven by the change in people’s financial transaction behavior after the COVID-19 pandemic. According to Think With Google, a survey conducted by three parties including Google, Kantar and Sixth Factor, concluded that: An amazing change is emerging in the personal finance sector in the Philippines. The impact of the COVID-19 pandemic and the suspension of physical contact has forced people to carry out more financial transactions online. Accordingly, Filipinos now prefer to use online apps rather than offline banking services, whether paying bills, managing portfolios or applying for online loan in the Philippines. (Source).
The growth in the lending market is driven by many factors. The most important factor is the increasing demand for financial resources and some borrowers who seek online loans as they are not be eligible for traditional bank loans.
The second factor driving the online loan market is the development of technology. Online platforms have made connecting borrowers with lending institutions easier and more efficient, simplifying registration and approval processes, and shortening disbursement times.
Demand and technology are two factors driving the market
Statista has given a very positive review of the Philippines online loan market, which is projected to grow in the coming years. According to Statista, online loans in the Philippines have many opportunities for further growth, including increasing adoption of digital platforms, increasing credit demand of small and medium-sized enterprises, and increasing variability of financial options.
Along with growth opportunities, online loan market in the Philippines faces potential challenges and risks, for example, the economic fluctuations in recent years, the regulations business registration in the Philippines or impersonating a financial institution to steal information and defraud customers, etc. If these challenges are not quickly solved, it will affect the development of online loans in the future.
In general, the online loan market in the Philippines embraces many opportunities and challenges. However, the assessment from financial experts for the future development trend is extremely positive. In the future, online loans will become more and more popular and will become the first solution for those in urgent financial needs.
Many positive signs have been seen in online loan market
If you are in need of online loans now, the best way for you to enter this market while securing your personal finances is to choose a reputable and reliable lender and stay away from fraudulent organizations. MoneyCat is one of the leading financial institutions in the online loan market in the Philippines.
MoneyCat has leveraged the benefits of technology advance in the loan application and review process so that you may easily apply for a loan and get same-day disbursement. At MoneyCat, you will be advised 24/7 and offered the loan that best suits your financial situation. We are committed to keeping all your personal information and credit transactions confidential, transparently disclosing interest rates and any costs arising. You may experience safe online loans at MoneyCat.
Online lending in the Philippines is projected with very positive outlook in the future. Don’t hesitate if you want to take out a loan to deal with urgent needs, daily expenses or even open a business. Contact MoneyCat for detailed advice and get the most suitable loan.
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