CIMB Bank Philippines, a digital-only bank, is using data points from customers’ mobile phones, including the number of apps installed, calendar invites and the percentage of unread emails, to underwrite customers for personal loans. In a country where 77% of the population is underbanked, the personal loans are a move by the bank to cater to customers outside of the financial system.

“The hurdle to get a bank account is quite high,” said Vijay Manoharan, CEO of CIMB Bank Philippines, noting that customers are saddled with burdensome documentation requirements. “The fees that banks charge here are prohibitive.”

The bank is an arm of CIMB Group, a Malaysia-based bank with $134 billion in assets and 14 million customers internationally. Through its work with the Singapore-based underwriting tech company CredoLab, CIMB Bank Philippines is aiming to reach customers who lack documentation or financial history to work with most banks.  According to Manoharan, the loans offer these customers a way into the financial system.

CredoLab CEO Peter Barcak said the company uses about 50,000 data points from customers’ smartphones to underwrite them. CredoLab only uses anonymized data, meaning it would never read customer emails or texts. Instead, the bank analyzes the number of texts and emails. The company then takes these data points and looks for correlations with responsible lending habits.

Customers also must provide a picture of their identity documents and match them with a selfie to apply for a loan, while some customers are asked to upload income information.

The loans offered by CIMB Bank range from $600 to $50,000, and they last between one and five years. The interest rates range from 1.5% per month to 3% per month depending on the customer risk, which translates to APRs of 18% to 36%. CIMB Bank Philippines said it acquired 1 million customers since the bank launched about 10 months ago. 

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CIMB Bank Philippines developed the personal loan product in about three months, and according to Manoharan, 50,000 customers applied for loans since the product was launched. 

Despite the potential to offer loans to a large group of customers, CIMB Bank faces competition from both legacy providers as well as e-commerce platforms like Grab and Gojek. While multi-service e-commerce apps are branching out into financial services, Manoharan said he doesn’t see them going too deep into lending in the near future. “They don’t want to take on risk,” he said.

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