MANILA — Philippine Bank of Communications (PBCom) has approved a P500-million credit facility for consumer finance firm Billease, with the funding earmarked to support the lender's expansion and broaden access to credit for Filipino consumers.

PBCom President and Chief Executive Officer (CEO) John Cary L. Ong said the funding will help expand Filipino consumers' access to credit.

"This facility enables us to extend our support to the unbanked or underbanked Filipino consumers in a prudent and sound manner, by working with a trusted partner with a strong track record and a good reputation," Mr. Ong said in a statement on Thursday. "It reflects our commitment to responsible lending and to widening access to finance for more Filipinos."

Billease originates, underwrites, and services consumer loans in the Philippines, including for customers with little to no credit background. By securing additional capital from banks such as PBCom, the company is able to scale its lending operations, reach more local consumers, and provide them with access to affordable credit.

"A few years ago, banks and fintech (financial technology) lenders were mostly seen as competitors. That is changing," Billease Chief Financial Officer Garret Go said.

"Banks have the capital and want retail exposure, and we have the origination, underwriting and collections to deploy it responsibly. What lets a bank say yes is evidence. We now have several years of audited results and loan performance that a bank can test for itself. PBCOM did that work, and we are glad to have them with us," he added.

PBCom is the third bank to enter into a funding agreement with Billease. The consumer finance firm first secured a P500-million credit line from Rizal Commercial Banking Corp. (RCBC) last year, which the bank doubled to P1 billion in September this year. Philippine National Bank (PNB) also granted a P500-million lending facility in August. Taken together, the three commitments give Billease a total of P2 billion in bank credit lines.

"As with its RCBC and PNB facilities, the facility is secured by a pool of Billease's consumer loans registered through the Philippines' Personal Property Security Registry. The pool is over-collateralized and kept topped up with performing loans," Billease said. In practical terms, registration puts the bank's claim on the official record, while over-collateralization means the loan pool securing the facility is worth more than the amount owed against it.

"PBCOM holds a first-ranking claim over a granular, diversified portfolio rather than exposure to a few large borrowers," it added.

According to Billease, the credit line can also directly support local merchants and households through its initiatives such as Billease Deals, which offer consumers affordable purchasing options while allowing sellers to keep earning.

"Each bank that comes on board makes our funding broader and more resilient," Billease CEO and co-founder Georg Steiger said. "It also says something about where the market is going: established Philippine banks are ready to fund consumer lending when it is done with discipline and transparency."

"In a tougher economy, that funding goes straight back to Filipino households and the local businesses they buy from. We would welcome more banks into that conversation," he added.

The deal with PBCom was signed in Manila by Mr. Ong and Mr. Steiger.

Billease, which is operated by First Digital Finance Corp., booked a net income of P782 million last year, with revenues growing by over 80% to P8.7 billion. Its gross loan book expanded by about 77% to P12.5 billion, while total assets reached P13.7 billion.

Whether additional banks take up Mr. Steiger's invitation, and whether existing partners deepen their commitments the way RCBC already has, are developments to watch as Billease works to broaden access to credit.

This article was originally reported by Katherine K. Chan for BusinessWorld.