As teased earlier, BigPay is now offering digital personal loans in a move to empower the unbanked community. BigPay is a digital finance platform invested by Capital A which started as an eWallet with a physical prepaid card. At the moment, they have 1.2 million transacting card users and they have recorded 2x growth Year-on-Year in 2021. According to BigPay CEO and co-founder, Salim Dhanani, 55% of Malaysians are underbanked.
Based on our early preview of the product, the Personal Loan option will appear as a new feature in the BigPay app under the “Payments” section. According to the introduction, the Personal Loan product offers approvals as fast as 5 minutes. Since this is a fully digital service, there’s no paperwork required and you can apply and make repayments within the app itself.
From our experience, BigPay is offering loans between RM1,000 to RM5,000 with an interest rate of 8% per annum. According to Salim, the interest rate is based on risk-based pricing, so a long-term BigPay user might get a more favourable rate. In terms of duration, BigPay offers an instalment period of 6, 9, or 12 months. There’s a stamping fee of 0.05%, so if you’re applying for a RM5,000 loan, it will cost you RM25 for the stamping fee.
For a loan of RM1,000 over 6 months, the repayment would calculate to RM173.34/month. Meanwhile, a loan of RM5,000 over 6 months will calculate to RM866.66/month.
As you would expect from BigPay, the interface is clean and simple. During the loan application, the app will display the monthly repayment, total interest, and other charges for greater clarity. If you agree with the terms, you can continue by providing your personal details and answering a few questions.
The entire application process is pretty seamless and straightforward. It doesn’t even require you to submit a copy of your payslip, bank, or EPF statement. If you meet their criteria, your loan should be approved as quickly as 5 minutes. However, if further checks are required, the verification may take up to one working day.
Once the loan is approved, you are given the chance to review your loan offer and you’ll have to watch a video to understand the terms and conditions. If you have any questions, it also provides a shortcut for you to chat with customer service.
To accept the loan, you’ll need to verify via OTP and this is be accepted as signing the moneylending agreement. The repayment is done via the BigPay balance app itself which currently accepts top-ups via online banking, credit or debit card, or by cash at 7-Eleven. The loan disbursement is done directly to your BigPay account, so you can use it for immediate spending via your BigPay card or withdraw as cash at an ATM machine.
The money lending agreement for the unsecured loan is issued by BigPay Later Sdn Bhd. They are a licensed money lender regulated under the Moneylenders Act 1951 by the Ministry of Housing and Local Government (KPKT). The loan is currently not Shariah-compliant but it is something BigPay is planning to release in the near future.
For customers that fail to repay either the principal or interest of the loan, BigPay has the right to charge additional overdue interest on the unpaid amount of up to 8% per annum. If you fail to pay an instalment in excess of 28 days after the due date, BigPay can terminate the agreement and pursue legal action.
Overall, this is a quick and easy way to get a loan on demand which is useful when you need cash for repairs or medical emergencies. This is also useful for the underbanked community, especially for consumers who don’t have access to a credit card. At the moment, the Personal Loans feature isn’t live yet for everyone and it will be rolled out gradually to the public in the next six months. If you’re interested, you can put your name on the waiting list here.
