The Philippines is accelerating toward its goal of becoming an upper middle-income economy, yet access to formal credit remains limited. Credit scores, often underestimated, are central to unlocking financial inclusion and empowering individuals and businesses.
According to TransUnion’s 2024 Credit Perception Index, only 54% of the unbanked population are familiar with formal credit products. This is a sharp decline from the previous year and trails behind the 70% among the general population. This drop in literacy contrasts with the Bangko Sentral ng Pilipinas’ progress in digital payments, which surpassed its 50% target in 2023. Digital adoption grows, but many remain locked out of credit opportunities.
A credit score serves as a financial passport. For lenders, it quantifies risk. For borrowers, it opens doors to loans, mortgages, and credit lines that enable upward mobility. Yet banks lent only 4.52% of their portfolio to MSMEs in 2024, far below the mandated 10%, showing how weak or absent credit profiles limit access to capital.
Strengthening credit participation benefits the entire economy. Greater visibility increases consumer spending, business growth, and housing activity. Efforts like the BSP–JICA Credit Risk Database aim to move lending from collateral-based models to risk-based systems. Meanwhile, credit card penetration passed 15% of adults in 2023, signaling broader adoption of credit tools.
Technology-driven solutions are now making credit more accessible. Platforms like JuanHand extend small loans to those without a credit history. By reporting to the Credit Information Corporation, repayment behavior builds future credit standing. Backed by parent company FinVolution’s AI-powered risk models, JuanHand adapts global tools to local borrower behavior and regulation, enabling faster, more precise assessments.
Loan approvals with JuanHand take as little as five minutes for new borrowers, and under 45 seconds for repeat users. This seamless process reduces barriers and encourages responsible borrowing. As Francisco “Coco” Mauricio, President and CEO of WeFund Lending Corp., explains, “Credit inclusion is about empowering individuals and small businesses to participate in the formal economy. By helping people build their credit histories, we are laying the foundation for long-term economic growth and financial resilience.”
