Perth fintech Peppermint Innovation provides payment services to the unbanked in the Philippines
There is much to debate about the growth of Australia’s startup ecosystem, but it is a truth almost universally (well, in Australia, at least) acknowledged that the local fintech sector is doing well, bolstered by government support and corporate involvement.
While most startups look to develop sophisticated products and services to tackle problems across every niche imaginable in the sector for savvy local consumers and companies, Perth fintech Peppermint Innovation thought there were significant opportunities to be found with those entirely new to banking.
Founded by brothers Chris and Anthony Kain, who grew up in the small town of Narrogin, the company is providing mobile remittance services to the unbanked – those without a bank account – in the Philippines.
Statistics show that around 70 percent of the almost 100 million-strong population in the Philippines is unbanked, for a number of reasons; as Chris explained, some people don’t have enough ID to open an account, while the fact that the country is made up of thousands of islands, many of them rural, has also meant it’s difficult for banks to open enough branches to reach everyone.
“Filipino cities present their own challenges. Some cities have 20 or 25 million people. While a bank branch might seem close geographically, traffic and public transport make it extremely difficult to get around the country. Paying your bills or going to the bank in person can take all day, and not everyone can afford to take that time off work,” he added.
According to BusinessWorld, 2014 survey of 18,000 Filipino households found that the foremost reason cited by households for not having a deposit account was not having enough money to keep an account, with service fees or minimum deposits too high for some to afford; a number of respondents also stated that they did not like dealing with financial entities, with trust in institutions low.
Of course, relying on cash can lead to its own problems, with Chris pointing to data from the World Bank that found people who use cash only can lose up to 25 percent a year through misplacement or theft.
“Relying on cash also prevents people from accessing loans which can help build small businesses and build the economy, and this is especially relevant for women, to whom 90 percent of microfinance lending is made,” Chris said.
That’s where Peppermint comes in.
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