Byte-Sized Loans: Why Online Basket Financing is the Way to Go

To the masses, banks represent very intimidating institutions with highly restrictive terms and long processing times that they cannot afford when in need. Add to this the trouble of going to the town center only to face the likelihood of being, well, rejected.   

This is why ordinary Filipinos turn to informal lenders for a quick cash loan. Usually , they seek loans from people they know—relatives and friends—who may sometimes be willing to lend money, but most often cannot as they also have financial struggles of their own. When push comes to shove, Filipinos turn to loan sharks with their infamous 5-6 lending scheme.

5-6 or “pautang” has been around for decades. It is popular among Filipinos despite its staggering 20% monthly interest rate. One of 5-6’s selling points, aside from being readily available, is a daily installment scheme. After all, small daily payments may feel less daunting especially when the cash to be paid seems to be smaller than it actually is. Many Filipinos, especially those with low salaries fall for this kind of lending practice, and into a deep hole. 

While it may be foolish to borrow money at an outrageously usurious 20% interest rate, subscribing to the 5-6 lending system is quite understandable as many Filipinos struggle with making ends meet. And then there are emergencies. 


The problem with unforeseen circumstances 

A little but unforeseen event can impact the financial stability of an ordinary Filipino. For instance, a broken refrigerator can catch a carinderia owner by surprise and halt her business. Likewise, a slow laptop can make a struggling breadwinner doing writing gigs on the side panic and lose clients. Most of those that are hit by unexpected financial needs have low credit scores and therefore can’t avail of credit lines whatsoever from the more trusted financial institutions. They don’t have credit cards to use in an emergency.

Cashalo understands how to ordinary Filipinos, small inconveniences amount to large disruptions that hit them disproportionately—such as the desperation that can be brought about by one malfunctioning laptop or a broken household appliance. They know the reality of strict banking practices and what lurks in the neighborhood—the unforgiving 5-6 lending system.  

With this knowledge, Cashalo introduced basket financing—a digital credit offer (and a first for any Filipino fintech) that allows consumers to buy what they need from retail stores.


Basket financing for immediate needs

Cashalo’s basket financing innovation is called Shop Now, Pay Later, with interest rates ranging from 0% to 3.99% per month, a far cry from 5-6’s 20% rates. As the name implies, one can also buy different things for their basket of needs—a set of items that can fill a shopping cart. 

In addition, unlike other lending options that require mortifying personal visits to money lenders or waiting in long lines only for the loan request to be rejected, Cashalo’s basket financing service is accessible and hassle-free. One only needs to download the Cashalo app and go to a Cashalo partner store for their purchases to be approved in as quick as 10 minutes. Cashalo’s approval of course also assures that by the fintech’s own rating of a one’s ability to pay, a modest amount can be availed, and will not indeed cause one to be mired in debt.  

When it used to be life was disrupted by small emergencies, Cashalo’s innovation—versatile, ready to go, fast, easy and safe loans—has set out to turn the tables around especially on loan sharks and the perils of 5-6. 

Shop Now, Pay Later is a safe, accessible, and reasonable lending option that ordinary Filipinos can use to aid them during dire financial times.