GCash-backed Fuse to topple '5-6' lending

The Asian Development Bank’s (ADB) first-ever fintech lending facility in Asia signals a pivot toward digitizing credit in the Philippines, as GCash lending arm Fuse Financing Inc. seeks to displace the informal “5-6” lending market that has long dominated the local economy.

- By DERCO ROSAL

Speaking to reporters on the sidelines of the ceremonial signing with Fuse, Suhail Khan, ADB director for private sector financial institutions, said the $30 million credit facility (around P1.75 billion) is designed as the foundation for a multiyear partnership rather than a standalone transaction.

“ADB strongly believes in long-term partnerships. Obviously, this is not a one-off. We really hope that this first experience for both sides will be very positive and that it will enable us to continue this partnership,” Khan said.

Under such long-term partnership, Fuse will be able to tap ADB for additional liquidity whenever credit demand surges. ADB also noted that this is its first fintech lending facility in Asia.