Deutsche Bank and consumer credit provider Home Credit Philippines (Home Credit) have entered into an innovative Environmental, Social and Governance (ESG) lending in the Philippines with strong objectives related to “S” considerations or which represent an important step forward in the development of ESG-related financing.
The short-term loan facility establishes clear metrics and key performance indicators (KPIs) with respect to ESG considerations, as well as concrete targets for the metrics Home Credit has committed to achieve over the life of the loan .
Key performance indicators focus on expanding access to credit to underserved communities in the Philippines, including women and new borrowers, and increasing the provision of financial education programs in the Philippines.
The transaction also includes targets around Home Credit’s digitization efforts, committing them to providing at least 60% of their loans through digital channels, to provide a higher level of transparency to customers and enable rates and terms. more equitable lending to clients, regardless of their economic or social background.
In addition, KPIs track data to confirm Home Credit’s commitment to protecting the privacy of its customers’ data and to ensure that data is only used by Home Credit for the agreed purposes. These KPIs will be measured and verified by an independent third-party advisor. The loan complies with the Asia Pacific Loan Market Association’s Sustainability Lending Principles.
“With the KPIs related to this lending facility, we are even better positioned to continue to provide fair and transparent access to financial services for the communities in which we operate,” says Jean Lafontaine, Group Head of Finance, Treasury, Mergers and acquisitions and investor relations. to mortgage.
“This is a pioneering transaction reflecting the transition from consumer lending in Asia to responsible and sustainable lending,” adds Kamran Khan, Deutsche Bank’s ESG Head of Asia-Pacific. “It also shifts the ESG landscape by demonstrating that beyond environmental considerations, funding can also be meaningfully tied to social impact goals, which in this case have a strong focus on financial inclusion. This is an emerging and important area of ESG, particularly in Asia, where the need and opportunity to generate impact is great. »