Boost Capital - Mastercard Strive Insight Brief Paper_Final
Appendix
How commonly Philippines-based lenders require documents as part of a loan
application: We’ve divided this up into four sub-cases: where the applicant’s income is based on business revenue vs a salary; where the bank’s risk exposure is low vs high (meaning where low-exposure means when loan capital is low (typically below PHP50k or PHP100k), or applicant risk is low (for example, they are an existing client or exhibit other low-risk profile elements) compared with cases high-exposure means when loan capital is high, or applicant risk profile is high):
| Salary Income-based loan | Business Income-based loan | |||||
|---|---|---|---|---|---|---|
| Low- exposure | High- exposure | High- exposure | ||||
| Personal Identity Verification | ||||||
| Picture ID (front) | 100% | 100% | 100% | |||
| Picture ID (back) | 100% | 100% | 100% | |||
| Birth certificate | 0% | 5% (only if place of birth must be confirmed) | 0% | |||
| Selfie (for matching to ID) | 50% | 100% | 50% | |||
| Marriage contract | 5% | 50% if applicable (married) | 5% | |||
| Residence verification | ||||||
| Proof of Billing/Proof of residential address | 30% (require one of any of these docs) | 100% | ||||
| Electricity Bill | 30% (require one of any of these docs) | 100% (require one of any of these docs) | 100% (require one of any of these docs) | |||
| Internet Bill | 30% (require one of any of these docs) | 100% (require one of any of these docs) | 100% (require one of any of these docs) | |||
| Water Bill | 30% (require one of any of these docs) | 100% (require one of any of these docs) | 100% (require one of any of these docs) | |||
| Credit card statement | 30% (require one of any of these docs) | 100% (require one of any of these docs) | 100% (require one of any of these docs) | |||
| Barangay Certificate: residency | 30% (require one of any of these docs) | 100% (require one of any of these docs) | 100% (require one of any of these docs) | |||
| Lease contract | 30% (require one of any of these docs) | 100% (require one of any of these docs) | 100% (require one of any of these docs) | |||
| House Title | 20% (if homeownership is a requirement) | |||||
| Income Verification: Salary income | ||||||
| Payslip(s) | 50%* | 85%** | 15%** | N/A | ||
| Bank statement(s) | 50%* | 50%* | 15%** | N/A | 85%85% | |
| BIR Form 2316 = Certificate of Compensation Payment/Tax Withheld (i.e. Income Tax Return) | 50%* | 50%* | 15%** | N/A | 85%85% | |
| Certificate of Employment (Employment confirmation letter) | 70%*** | 100% | N/A | |||
| Employee ID card (Staff ID) | 70%*** | 100% | N/A | |||
| Employment contract | 0% | 15% | N/A | |||
| Proof of remittance | 70% (if applicable) | 100% (if applicable) | N/A |
| Business Identity Verification | ||||||
|---|---|---|---|---|---|---|
| Mayor's permit | N/A | 100% | 100% | |||
| BIR certificate (BIR 2303) | N/A | 70% | 100% | |||
| Barangay Certificate: business clearance | N/A | 40% | 100% | |||
| Annual Income tax return | N/A | 0% | 50% | |||
| IF Sole Proprietorship(i.e. SME loan to individuals) | DTI certificate | N/A | 70% | 100% | ||
| IF Partnership: | SEC Certificate of Partnership | N/A | 30% | 70% | ||
| IF Partnership: | Articles of Partnership | N/A | 30% | 70% | ||
| IF Partnership: | Board Resolution or Secretary Certificate authorizing representative | N/A | 30% | 70% | ||
| IF Corporation: | SEC Certificate of Incorporation | N/A | 30% | 70% | ||
| IF Corporation: | Articles of Incorporation | N/A | 30% | 70% | ||
| IF Corporation: | General Information Sheet (GIS) | N/A | 30% | 70% | ||
| IF Corporation: | Board Resolution or Secretary Certificate authorizing representative | N/A | 30% | 100% | ||
| IF Corporation: | By-laws | N/A | 0% | 30% | ||
| Income Verification: Business Income | ||||||
| BIR Form 1701 (Income tax return) | N/A | 0% | 20% (if applicable) | |||
| Photo of business | N/A | 90% | 100%*** | |||
| Video tour of business | N/A | 20% | 100%*** | |||
| Invoices/Receipts | N/A | 0% | 20% | |||
| Inventory list | N/A | 0% | 10% | |||
| Photo of inventory | N/A | 20% | 100% | |||
| Evidence of web presence | N/A | 20% (except 100% for online sellers) | 50% (except 100% for online sellers) | |||
| Trade references: suppliers | N/A | 50%†50%† | 50%† | 30%‡ | ||
| Trade references: customers | N/A | 50%†50%† | 50%† | 30%‡ | ||
| Collateral documents (if collateralized) | ||||||
| IF land | Land Title | 100% | 100%§ | 100% | 100%§ | |
| IF land | Tax declaration for real property | 0% | 100% | 0% | 100% | |
| IF vehicle | Official Receipt (OR) | 100% | 100% | 100% | 100% | |
| IF vehicle | Certificate of Registration (CR) | 100% | 100% | 100% | 100% |
- 50% of lenders require ALL of these docs, 50% require ANY ONE of these docs. Number of statements varies from 1 to 6 (for example, 3 monthly bank statements or 3 payslips.
** 85% of lenders require ALL of these docs, 15% require ANY ONE of these docs. Number of statements required varies from 3 to 12 (depending on low/high exposure),
*** Either one accepted.
† 50% of lenders require both supplier and customer references, 50% require either. Number of references varies from 1 to 3.
‡ 70% of lenders require both supplier and customer references, 30% require either. Typically 3 required.
§ CTS only required when ownership has recently changed but updated title not yet issued.