Peppermint hit several milestones during the last financial year, and it has now reached the stage where it could accelerate on its expansion strategy.

Fintech company Peppermint Innovation (ASX:PIL) has just completed a highly successful financial year, achieving several critical milestone targets.

Although it posted an overall loss of $2.83m (which included $0.97m of non-finance costs resulting from convertible notes accounting), the company has now built the foundation for the next phase of its growth.

Part of the company’s long-term success will be underpinned by the recent granting of a financial lending licence by the Philippines Securities Exchange Commission (SEC) back in July.

Speaking exclusively with Stockhead, Peppermint’s CEO Chris Kain said the licence will give its bizmoPay lending program and bizmoto agents significant impetus.

“Being granted a financial lending licence by the Philippines SEC is a significant milestone in Peppermint’s overall business strategy to provide financial inclusion to millions of Filipinos,” Kain told Stockhead.

Around 70% of the Philippines’ population is unbanked and many more are underbanked.

That means they don’t hold a typical bank account, or the means of securing any form of loan from a traditional bricks and mortar bank.

However, about 86% of the population use their mobile phones to access the internet, giving immediate demand for mobile phone app-based lenders and lending programs.

“This gives Peppermint’s micro-enterprise loan program called bizmoPay a significant impetus, with our lending focused on our established agents and eco-system,” said Kain.

“Our eco-system spans a variety of services like payments, delivery and logistics, and e-commerce,” he added.

Under licensing terms, Peppermint can now offer alternative non-bank micro-enterprise loans to its qualified bizmoto agents, registered bizmoto network members and enterprise platform partners.


Highlights for the year

During the year, PIL signed a number of partnership agreements that made it easier for its bizmoto agents to cash in money or top up their mobile wallets.

Back in April, Peppermint signed a deal with Cebuana Lhuillier, a Philippines-based store network that provides a range of micro-finance services.

Cebuana is the country’s largest microfinance provider, with four million micro savings account holders and 20,000 domestic partners. It has key business channels in pawning, remittance, micro-insurance and micro-savings.

Under the terms, registered agents on PIL’s bizmoto network would be able to cash in money and top up their mobile wallets at any of the 2,500 Cebuana shop fronts and accredited stores across the country.

That agreement followed another crucial deal in March with the Bank of the Philippine Islands (BPI) – the oldest bank in the Philippines.

In that deal, existing bizmoto agents will be able to seamlessly top-up their mobile wallet 24 hours a day, 7 days a week, 365 days a year via an online access to a BPI account.

Peppermint also struck an agreement with GCash, enabling its bizmoto merchants, bizmoto agents and bizmoGo riders to  accept payments directly from GCash mobile wallet holders.

That deal has significantly opened up bizmoto’s visibility and market reach, as nearly one in three Filipinos, or around 40 million people, currently hold the GCash mobile wallet.

Other partnerships followed, which included a partnership with ECPay. That deal allowed bizmoto agents to not only physically cash-in money, but also enabled them to instantly top up mobile wallets at any one of ECPay’s 13,000 partner outlets nationwide.

Another strategic partnership was also signed in July with the global TurnKey Lender platform, which would deliver all the ‘back-end’ support services for bizmoPay.

Peppermint’s business also includes insurance, where it launched the bizmoProtect micro-insurance product earlier this year in partnership with Cebuana Lhuillier Insurance Solutions.

During the year, PIL has also managed to increase the number of registered bizmoto agents to 55,218, bizmoGo riders to 636 and bizmoto merchants to 688.

“The bizmoto brand is emerging throughout the Philippines, and the company is firmly focused on its growth strategy through the ongoing development of its Peppermint platform across its four fundamental business sectors of payments, delivery and logistics, e-Commerce, and financial services,” explained Kain.


bizmoPay pilot program underway

PIL is currently on track to expand its initial group of 10 bizmoto agents who have been chosen to trial bizmoPay, to around 100 agents by this month.

“Once we’re happy that bizmoPay is operating seamlessly, it will be made available to all 55,000 plus bizmoto agents and every registered bizmoto network member who qualifies.” “We will then promote the wider adoption of bizmoto services and drive the use of the wider bizmoto system,” Kain told Stockhead.

Kain explains that the Philippines is an attractive market for alternative non-bank lenders like Peppermint, because 70% of its 108 million people are unbanked.

The average age in the country is just 24 years, with 90% of the population not having a credit score. But there are approximately 118 mobile phones for every 100 people.

Research also shows more than 7.5 million users have currently accessed other non-bank, mobile app lending services – with some of these services acquiring on average 125,000 new users per month.

“What we’re already seeing is the alternative non-bank consumer lending market is growing rapidly throughout the Philippines, and Peppermint is well placed to capitalise on this growth trend via our established bizmoto platform and bizmoPay,” Kain said.

Peppermint closed the year well-funded, with $3.1m in the bank which will support its expansion strategy over the next financial year.

And with a strong net asset position of $2.63m to the end of 30 June – the best reported in the last five years – PIL says that it’s now ready to springboard into the next stage of the company’s growth phase in FY22.

“Our stated forecast is to issue up to 100,000 small micro-loans worth approximately A$30 million over the next 36 months under our ‘buy-now, pay later’ bizmoPay agent/merchant model,” Kain said.

“We will also be looking to  advance our stated objective around obtaining an electronic money issuer (EMI) license to further empower our mobile app based bizmoPay lending model and promote our bizmoto ecosystem of services to the wider Filipino population in-country and offshore.”

“Peppermint also intends to continue to develop its four business divisions via organic growth and strategic acquisitions.”

This article was developed in collaboration with Peppermint, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.