The Asian Development Bank (ADB) has green-lit a $30-million (over ₱1.7-billion) loan for Fuse Financing Inc., the lending arm of GCash, which aims to expand lending to small businesses.

The Manila-based multilateral lender approved its loan financing for the Fuse Enabling Financial Inclusion through GCash’s Online Lending Platform project on Oct. 23, documents showed.

The loan “will be used to expand Fuse’s working capital loans to micro-, small-, and medium-sized enterprises (MSMEs), including women-owned MSMEs (WMSMEs), using the GCash platform,” the ADB said.

Specifically, the fresh ADB financing “aims to increase access to finance for MSMEs, including WMSMEs and MSMEs in high-poverty-incidence provinces, through digital lending that enables access to credit,” the lender said, noting that structural barriers continue to hinder homegrown MSMEs’ access to credit.

Fuse Financing, the lending arm of GCash parent company Mynt, primarily serves socioeconomic classes C2, D, and E, which include lower-middle- to low-income households that often lack access to formal credit, the ADB noted. “C2 represents the lower middle class, D is the working class who belong to the low-income bracket but not considered poor, and E includes the poorest households, often living in informal settlements or with minimal financial security. These segments have long relied on informal and often predatory lending,” it pointed out.

Citing data from the Bangko Sentral ng Pilipinas’ (BSP) latest financial inclusion survey, the ADB lamented that 57 percent of Filipino borrowers still depend on informal lenders that charge interest rates as high as 20 percent per week, deepening their financial strain. This “[places] a heavy burden on limited household budgets.”

Meanwhile, the ADB defined high-poverty-incidence provinces as those with poverty rates exceeding the national average of 15.5 percent in 2023, where many MSMEs operate informally due to limited support and infrastructure.

These provinces account for 26 percent of project beneficiaries, while WMSMEs face added challenges such as gender barriers and low financial literacy that hinder access to formal financing, the lender said.

According to the ADB, Fuse’s new project aims to reduce poverty and promote social inclusion by expanding MSMEs’ access to financing, particularly in underserved and marginalized areas.

Fuse will do so through a fully digital lending platform that uses GScore to assess creditworthiness without requiring traditional financial documentation, removing barriers that often exclude the unserved and underserved from formal lending, the ADB said.

It will also develop tailored financial products and provide targeted financial literacy training for WMSMEs, the lender added.

This project aligns with the lender’s 2024-2029 Country Partnership Strategy (CPS)—its latest medium-term lending program—for the Philippines by helping improve the financial and private sector environment and supporting the roadmap for building a strong, inclusive, and sustainable financial system, according to the ADB.