The Philippian originator Right Choice Finance (RChF) has prepared a promotional event with a 1% cashback bonus for investors on Bondster. Anyone who invests in its loans during April will receive 1% of the invested amount back into his/her account at the beginning of May. The company is registered in Singapore, and it has been profitable since its very inception in 2016. Not even the Covid pandemic managed to change that as the company used it to expand further. Kodi Kodrowski, the Managing Director of Right Choice Finance, answered our questions in the interview below.
What is new in your company?
The Right Choice Group has had a brisk start to 2021. We have completed several acquisitions and partnerships which will increase revenues more than 100% in the calendar year. Our loan volumes in the Philippines picked up closer to pre-pandemic levels in the first quarter and are starting to surge as we head into the second quarter. We will continue to place attractively priced loans on the Bondster platform this year. The new import batch has over € 350,000 in total volume at a very attractive rate of 16% with additional 1 % cashback bonus.
What kind of loans will you offer on the Bondster newly and what will be the interest rate and guarantees?
We will continue to offer our unsecured and secured loans on Bondster. Our interest rates vary but are in the range of 12.5% to 18% p.a. and we have buyback guarantees on all of the loans posted on Bondster.
What kind of clients do you focus on with payday loans? What is the average interest rate on these loans?
Our payday loan customers are typically staff of MSMEs that we acquire because the MSMEs use our HRIS software which has a loan engine built into it. The interest rate range is from 2% to 5% per month.
Could you please describe your risk management policy and related procedures?
We have an extensive risk and underwriting policies for each of our products that have evolved over the last 5 years. Our in-house counsel leads our risk team in daily oversight as well as periodic reviews.
What people usually borrow money for?
Our business borrowers typically borrow for working capital or expansion. Individual borrowers are borrowing for school fees, home repairs, vehicle or property purchase, or an unexpected emergency like medical expenses.
What is your USPs and competitive advantages?
Our tech stack with fully integrated HRIS, loan engine, and digital wallet is unique on the market and allows to have a very low cost of customer acquisition.
What is your position on the market?
Our combined portfolio in our finance corporation and rural bank ranks in the top 100 by asset size based on the central banks 2019 rankings (2020 is not out yet).
What opportunities people must borrow money and what is specific for them?
The typical family in the Philippines is significantly under-levered. This is part of the major funding gap in emerging markets. Due to the difficulty in obtaining loans from banks many businesses and individuals must resort to non-bank and/or unregulated sources of funding.
Could you please describe your company shortly?
We are a diversified financial services group with headquarters and a Major Payments Institution license in Singapore and 5 branches in the Philippines with a finance corporation and banking license. We cater to MSMEs and their staff with a wide array of loan, remittances, and payments products in Singapore and the Philippines. Our group has been consistently profitable over the last 5 years and we have been growing at an accelerating rate.
Is lending in Philippines subject to any regulations?
Yes, lending is regulated in the Philippines depending on the type of license. Our finance corporation is regulated by the SEC and our bank is regulated by the BSP.
Have you been affected somehow by covid-19 pandemic?
Over the last year our business had to adapt to the pandemic just like everyone else. We were fortunate to have a strong balance sheet to come through the worst of the pandemic and actually take advantage of a number of opportunities that presented themselves as our markets returned to the new normal. We made several acquisitions and strategic partnerships that increased our scale of operations in 2020 and we expect will foster significant growth now in 2021.
What are your projections for the next quarter in terms of issued loans?
We expect to see a large surge in loan disbursement in the next quarter as the economy gains momentum and day-to-day activities go back to normal.
Are you planning to introduce any new products to your customers in the Philippines?
We already have a comprehensive range of loan products that serves the needs of the market. Our focus is on continuing to scale those products.