Smile API: Bridging Philippine Digital Banks' Loan Challenges

The surge of digital banks in the Philippines aimed at boosting financial inclusion is now met with challenges in loan collections, as indicated by BSP Governor Eli Remolona Jr. In this post, we delve into the obstacles faced by Philippine digital banks and how Smile API offers a transformative remedy.

The rise of digital banks in the Philippines promised increased financial inclusion through enhanced access to digital financial services. However, recent statements by BSP Governor Eli Remolona Jr. suggest that these digital lenders are grappling with loan collections, hindering their lending activities. In this blog post, we explore the challenges faced by Philippine digital banks and how Smile API can serve as a transformative solution.

The Struggles of Digital Lending in the Philippines

While digital banks in the Philippines have excelled in online customer acquisition and deposits, the collection of loans and debts remains a persistent challenge. Governor Remolona highlights the difficulties arising from inadequate due diligence, resulting in high defaults. The reliance on big data analytics for credit scoring has proven insufficient, especially for thin-file customers lacking an extensive traditional credit history.

Addressing Information Gaps with Smile API

Smile API emerges as an innovative solution to bridge the gaps in digital lending. By leveraging alternative data sources, it enables digital lenders to build comprehensive borrower profiles. This comprehensive approach provides insights into customer identities, incomes, and risk levels, facilitating better-informed credit decisions. Smile API's streamlined verification and risk assessment capabilities play a crucial role in improving portfolio health and long-term viability.

The Power of Alternative Data for Digital Lending

To overcome challenges related to validating identities, assessing incomes, and evaluating risk levels, Smile API taps into authoritative sources of alternative data. This includes employment, income, and financial information from official providers such as digital payroll, government agencies, banks, and other validated partners. By incorporating these diverse data points, Smile API creates a holistic profile of borrowers, offering a more accurate evaluation of creditworthiness.

Seamless Verification for Philippine Digital Lenders

Smile API simplifies the process for digital banks in the Philippines to access alternative data. Through a single integration, lenders can enable verification flows that utilize Smile's extensive connections. Applicants securely share access to their profile data from various authoritative sources such as the SSS, Philhealth, Pag-IBIG, GSIS, or their payroll provider, which Smile then aggregates and standardizes into an easily digestible format. This eliminates the need for manual review of fragmented information from various sources, providing lenders with structured, digital data.

Reduced Default Risk for Philippine Digital Lending

Smile API contributes to smarter underwriting for Philippine digital banks by tapping into previously inaccessible data. This results in a clearer understanding of applicants' true identities, incomes, liabilities, and risk levels before approving loans. The improved ability to identify potential fraudulent or excessively risky borrowers minimizes delinquencies and allows lenders to serve more qualified applicants.

Streamlined Collections for Philippine Digital Banks

For borrowers who slip through the vetting process and default, Smile API supports the collections process. With consented access to borrowers' government-verified financial data, lenders gain updated visibility into defaulters' contact information, employment status and incomes. This information guides sensible recourse strategies, offering personalized alternatives based on real contact information and financial contexts visible in Smile data.

The Path to Sustainable Digital Lending in the Philippines

Smile API provides the missing puzzle piece that enables Philippine digital banks to make well-informed, risk-aware lending decisions, resulting in quality portfolios. Comprehensive insights from verified alternative data sources fill the information gaps that previously hampered evaluations. This allows digital lenders to expand inclusion by funding more deserving borrowers while minimizing defaults through prudent underwriting.


Smile API emerges as a powerful ally for Philippine digital banks, offering a sustainable solution to their loan collection challenges. By leveraging alternative data and providing comprehensive insights, Smile API empowers digital lenders to navigate the complexities of lending in a digital landscape. The future success and stability of digital banking in the Philippines hinge upon innovative solutions like Smile API that enable prudent, sustainable digital lending.

If you are a Philippine digital bank seeking better loan assessment and verification, book a call with Smile API here.