Local startup Digicro has raised 300,000 in seed capital to bolster its mobile phone-based microloan service in Cambodia, which has been developed by its subsidiary, Spean Luy.
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The funds will come from investors at Japan-based Showcase Capital, the corporate venture capital arm of Showcase-TV Inc, which specialises in investments in internet and mobile industries.
Digicro, which stands for ‘digital microfinance’, was founded by Japanese national Yuta Nagano in 2018 to expand access to finance around the world.
Spean Luy developed Spean Loan, a mobile app that enables borrowers to apply for a small loan – from $50 to $1,000 – in 10 minutes without paperwork and without the need to visit a physical branch.
Spean Loan uses machine learning to build a credit scoring system and evaluate customers’ ability to repay, and it is already available in iOS and Android platforms.
Spean Luy is now waiting to receive a business license to disburse microloans, which is expected to be approved this month.
Faizal Martinus, head of IT at Spean Luy, said in a statement this week that Spean Loan uses smart technology to gather information from customers so that they can get a loan as fast as possible, adding that the app screens borrowers to ensure they are trustworthy.
“We minimise the hassle commonly faced during loan applications,” Mr Martinus said.
According to Digicro, more than 60 percent of Cambodians have access to internet but many are still unable to get a loan because they lack official documents or collateral, or live in remote areas where banks do not operate.
“Our team developed Spean Loan to serve those underserved through our app. Instant approval will help micro-entrepreneurs get their daily working capital and people who need emergency funds. We strongly believe we can contribute to financial inclusion in the country,” Mr Martinus said.
Digicro will be a leading player in efforts to enhance access to finance for the unbanked in Cambodia and other emerging markets, the company said.
Kea Borann, president of the Cambodia Microfinance Association, told Khmer Times that providing a loan without a face-to-face meeting might prove difficult.
“There is no law that requires providers and customers to meet directly,” he said. “However, loan providers must evaluate the customers based on their job and income and they have to get the customer to sign and put their thumbprint on the application. This information is then sent to the Credit Bureau of Cambodia.
“All microfinance institutions that have received a license from the National Bank of Cambodia must do this,” he said, adding that he thinks “it is difficult to provide a loan without having a meeting with the customer.”
Mr Borann said none of the members of his association offer a mobile app-based loan service.
“None of our members provide loans via a mobile app. Customers can apply for a loan online, but they still need to meet with an MFI representative.”
Last October, NBC, in a press release, urged the public to be wary of companies or individuals offering loans via SMS.
NBC’s statement warned against companies that promise a fast service without paperwork or collateral.
“Sending messages to mobile phones to offer quick loans without having to present documents or collateral in Phnom Penh as well as in provincial towns and cities in Cambodia is illegal.
“NBC has never given licenses to companies or individuals that offer loans via SMS.
“The public should avoid the use of informal lending services which may result in the borrower being scammed,” the statement read.