As part of the partnership, RCBC will pilot Bizbaz’s AI-driven credit assessment and scoring
tool which aims to broaden access to loans, especially within the MSMEs, unbanked, and
underbanked communities. The initiative will also support the reduction of
non-performing loan (NPL) risks, offering improved predictability assessments.

“The current credit system is broken, with most banks in Asia relying on financial
history-based credit risk systems. With most of the Asian population not even having a
credit score, the current system is obsolete. There needs to be an alternative that can
harness the latest AI technology and behavioral science data available.

For MSMEs, this translates to access to a credit lifeline that would otherwise be
unattainable. For banks like RCBC, this aligns with their commitment to financial inclusion
and innovation, increasing predictability, reducing NPL risks, and leading to long-term cost
savings,” said Hayk Hakobyan, CEO and co-founder of Bizbaz.

Notably, in the Philippines, 78% of the bankable population falls either unbanked or
underbanked, positioning the country among the top 10 nations with a significant
unbanked population. Additionally, Southeast Asia has witnessed a steady rise in NPLs in
recent years, with the World Bank projecting an increase in the NPL ratio to 5.9% in 2023
from 5.7% in 2022, surpassing the global average of 4.2%. In the Philippines alone, the NPL
ratio stands at 4.2%. The World Bank estimates that Southeast Asia incurs an annual loss
of approximately 50 billion USD due to non-performing loans (NPLs).

“RCBC strives to be at the forefront of emerging technologies and data-driven
innovations. With this partnership with BizBaz, we can maximize AI’s massive potential and
unlock more opportunities for our countrymen, especially the MSMEs," said Eugene S.
Acevedo, RCBC President and CEO.

Bizbaz creates a customer or business risk profile by analysing financials, health, lifestyle,
and social footprints. Leveraging personality-based and voice-based risk assessments,
Bizbaz determines suitability for loans. This approach results in a more accurate and
comprehensive credit scoring system that considers a broader array of data, including
alternative sources. The streamlined process facilitates faster and more efficient credit
scoring, reducing the time borrowers wait for loan approval and mitigating bank default
risks.

Current clients, including a national Indonesia-based bank, have seen increased revenue
between 2-3x, reduced customer acquisition costs by up to 40%, and reduced bad debt
default by up to 50%.

We are thrilled to announce our strategic partnership with Bizbaz, making a significant
leap forward in our commitment to financial inclusion in the Philippines. We believe that
by integrating AI into our credit score assessment process, we are not just innovating; we
are pioneering a path towards greater access and opportunity for MSMEs,” said Lito
Villanueva, Executive Vice President and Chief Innovation and Inclusion Officer of RCBC.

Bizbaz previously closed its $4M seed funding in October 2022, led by HSBC Asset
Management in addition to investments from Vynn Capital and SOSV.