A responsAbility-managed private equity vehicle focusing on financial inclusion is taking a minority stake in C88 Financial Technologies Pte. Ltd. The Singapore-based company is the largest digital sales platform for financial, insurance and investment products in Southeast Asia.
C88 is a market leading fintech provider which operates financial marketplaces for lending and insurance products in Indonesia and the Philippines.
C88 is the largest digital credit risk scoring, finance, insurance and investment platform in Indonesia and the Philippines.
The company has served over 50 million customers across these two markets since 2013.
C88 invented and pioneered the digital sales channel for Indonesian and Philippine financial and insurance institutions; delivering high quality, low cost, high volume distribution solutions that now account for more than 20% of many of their partners’ total sales.
The company also pioneered the ‘underwriting marketplace’ concept, where credit risk scoring and decision engines are embedded directly into the financial e-commerce experience, such that a customer can receive a principal in-application approval with a risk-adjusted price.
In Indonesia and the Philippines, only 12-13% of the population over 15 years of age have loans from financial institutions. Penetration of insurance products is similarly low, with premiums/GDP at 2-3% compared to an average of 10% for the world’s principal insurance markets. Distribution of financial services remains primarily offline via branches and direct sales agents, with only about 10% distributed digitally.
Creating a track record for financial inclusion
It isn’t hard to find the cause for this low level of financial inclusion: Banks in the retail segment overwhelmingly favor customers that already have a track record, most typically through the use of a credit card.
As Henning Haugerudbraten, Principal Financial Institutions Equity Investments in charge of responsAbility’s portfolio in Asia, explains: “Banks’ underwriting decisions are for the most part subject to the judgmental discretion of individual underwriters and a high proportion of creditworthy customers are denied credit because banks do not use risk-based pricing.”
“A high proportion of creditworthy customers are denied credit because banks do not use risk-based pricing.”
He goes on to add that “As a result, these banks lend almost exclusively to high income and upper middle class customers, which is reflected in very low approval rates for a large proportion of bankable customers who remain excluded from financial services.”
Fintech filling the vacuum
Since late 2013, C88 Financial Technologies Pte. Ltd.’s technological solutions have been providing a new digital distribution channel to banks and insurance companies while offering retail customers an easy and accessible way to compare and obtain loans and insurance products.
C88 is a Singapore-based fintech company providing a digital distribution platform with advanced price comparison services on lending and insurance products in Indonesia and Philippines. The company collects rich data from its customers and provides customer selection and KYC services to its 90 financial partners (leading insurers and lenders).
C88 in figures
50 million digital customers
C88 is the largest digital sales platform for financial, insurance and investment products in Southeast Asia.
20 % channel contribution
C88 pioneered digital sales for financial institutions in Southeast Asia. It now accounts for a fifth of many partners’ volume.
90 financial institution partners
C88 is the leading provider of digital sales and data solutions to financial institutions in Southeast Asia.
The company receives applications from a broad share of the middle and lower middle class population. About 75% have a monthly salary below USD 750 per month and 55-65% do not have pre-existing credit card or similar banking records.
The company is growing quickly: In 2017 alone, C88 received 1.7 million applications, more than double over the previous year.
Teaming up with a strong partner
To scale business further and to deepen the relationship with new and existing customers, C88 has entered a partnership with Experian, a global leader in consumer and business credit reporting and marketing services.
The collaboration will help C88 further increase its product offering. This will allow millions of customers to get their first loans and start building a credit history, which will in turn help them obtain further financing on better terms.
What C88 does
A proprietary digital sales network enables financial institutions to sell online.
Assess and price risk
Scoring and Decisioning
C88 helps credit and underwriting departments better understand retail risk.
Unlock decisions in data
Data and Analytics
Unlock game-changing insights and make better decisions with industry leading machine learning and big data solutions.
Powering financial institutions
Software and Integrations
Industry-leading Experian and C88 software, system and financial institution integrations that drive faster and more efficient processes.
Experian’ business originated in the US and UK with the running of credit bureaus, which are essentially B2B businesses providing credit information to financial institutions. In recent years the company has built out a B2C business, which makes credit score data available to consumers to help them engage with financial institutions.
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Together, the partners will develop software to improve the matching of customers with appropriate products. Experian’s deep expertise in credit assessment will complement C88’s customer outreach and accurately target the correct products to customers lacking in financial track record, eventually also to entice banks to develop and offer new products on the back of the Experian/C88 analytical solutions and customer information.
It is expected that this will allow millions of customers using C88’s platforms to get their first loans and to start building a credit history, which will in turn help them obtain further financing on better terms.
A PERFECT ADDITION TO THE PORTFOLIO
Henning Haugerudbraten is convinced: “C88 is an ideal addition to our growing portfolio of impact-oriented financial institutions in emerging markets. The company already helps match customers with appropriate products and facilitates pricing transparency in the Indonesian and Philippine markets. The next objective is to use the platform to provide access to finance to millions of unbanked customers, creating an extensive positive impact for financial inclusion.”
“The next objective is to use the platform to provide access to finance to millions of unbanked customers, creating an extensive positive impact for financial inclusion.”