As the Philippines pushes closer to its goal of becoming an upper middle-income economy, access to credit remains one of its biggest hurdles—and opportunities. Often overlooked, credit scores are quietly becoming one of the most powerful tools for widening financial inclusion and driving long-term growth.
The latest Credit Perception Index (CPI) from TransUnion highlights the urgency: only 54% of unbanked Filipinos are familiar with formal credit products, a steep decline from the previous year and well below the 70% awareness seen among the general population. This drop comes at a time when the Bangko Sentral ng Pilipinas (BSP) has already achieved a milestone in digitalization, surpassing its target with 52.8% of retail payments processed digitally in 2023.
Digital adoption is rising fast—but without credit profiles, millions remain locked out of transformative financial products such as small business loans, mortgages, and affordable credit lines that could lift them into greater financial security.
The power of a credit score
A credit score is more than a number. For lenders, it’s a measure of risk; for borrowers, it’s a key to opportunity. A healthy score can unlock lower interest rates, higher credit limits, and faster approvals. Without one, potential borrowers—especially MSMEs—are often sidelined. The gap is stark: in 2024, banks allocated just 4.52% of total loans to MSMEs, far short of the 10% mandated by law. Without stronger credit data, many promising small businesses are left without the financing they need to grow.
Improving credit literacy and participation is not just good for individuals—it fuels the economy. Stronger credit penetration drives consumer spending, helps MSMEs expand, and boosts the housing market, all contributing to GDP growth. Initiatives like the BSP–JICA Credit Risk Database are paving the way for risk-based lending, while the surge in credit card adoption—nearing 1 million new cards per quarter in 2023—shows more Filipinos are beginning to embrace formal credit systems.
Technology and credit visibility: Breaking barriers
Credit visibility is not only a milestone for individuals and businesses; it’s an economic accelerator. Platforms like JuanHand are bridging the gap by offering microloans to those without formal credit histories—and reporting repayment behavior to the Credit Information Corporation (CIC). This means even first-time borrowers can begin building a financial track record, laying the groundwork for bigger opportunities ahead.
As the Philippine arm of NYSE-listed FinVolution Group, JuanHand leverages advanced AI and machine learning to process massive volumes of data and deliver quick, reliable credit assessments. Adapted for the Philippine market, this technology considers borrower behavior, risk trends, and regulatory requirements, allowing JuanHand to extend credit responsibly while keeping defaults low.
The results are striking: with just a name, citizenship, contact details, and one valid ID, first-time borrowers can get approved in as little as five minutes. For repeat users, loans can be disbursed to e-wallets in under 45 seconds—proof that access and efficiency can go hand in hand.
Francisco “Coco” Mauricio, President and CEO of WeFund Lending Corp. (operator of JuanHand), puts it simply: “Credit inclusion is about empowerment. By helping individuals and small businesses build credit histories, we are laying the foundation for lasting financial resilience and sustainable economic growth.”