| I spent some time this summer learning about some of these issues if anyone would like a little context about the Philippines. Remittances are a way for overseas foreign workers (OFWs, think jobs like maids in Saudi Arabia) to send money back home to their families. This is typically (but not exclusively) the mother of the household who sends money back to the father and children for things like food and school tuition. It's not uncommon for this money to be squandered by those back home (i.e. used on material possessions or vices instead of education) Most remittance money flows through pawn shops who have come to act like small banks for the unbanked. This works because low income people are typically high risk lendees. So, pawn shops take physical collateral against any cash loans. Naturally, these pawn shops got so good at making lending decisions and moving hard cash around the provinces (low income areas), they've effectively become the standard for low-income cash solutions. Coins.ph effectively is throwing their hat in the ring to compete against pawn shops and payment providers, creating competition in the cash market which will (hopefully) increase distribution and lending transparency and decrease fees (Philipino payment settlement is very fragmented). My own opinion is Coins.ph is a really good idea for small retail solutions, but not for P2P lending. The reason is crime is a huge issue in the Philippines and Coins.ph is essentially a map of people who would be able to be robbed if they carried substantial amounts of cash. Contrast this to small retail outlets who can now be enabled to lend cash to customers using already-established cash-handling processes. I feel there would have to be substantial differences in norms put in place to allow for actual P2P lending. i.e. stringent identity controls and social features which de-risk the transaction for the lending party. |