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THEY are the face of hard work - the bus driver, the nurse, the factory worker. But behind these stalwarts in Singapore's workforce are their invisible credit access problems that one startup now wants to bring to the surface.
Hizam Ismail and Mohamed Abbas, both 26, came together after their army days to set up Onelyst after being struck by ordinary workers' need for credit from time to time.
"We saw an inequality when it came to credit access," said Mr Hizam in an interview with The Business Times. "It is a blanket statement that they are risky (borrowers). But they've never had the chance to prove their creditworthiness."
The business was started about two years ago, after the young founders reflected on their common experience. Having grown up in lower-income families, the pair watched neighbours and relatives get into trouble with loan sharks and unsavoury characters tied to unlicensed moneylending, said Mr Hizam.
The average Singaporean owns six credit cards which earn cashback, air miles and discounts. But the less privileged are not granted the same plastic that could help them to relieve some cashflow pressures.
Mr Mohamed also watched his family once struggle to get assistance, and understands personally the hardship of blue-collar workers.
"Whenever it rains heavily, banks give umbrellas to people who already have them," he said, noting that the compliance cost for a bank to process a S$10,000 loan is likely similar to a S$2,000 one, making it unattractive for banks to serve this segment.
The pair focused on the borrowing process among moneylenders, noting that borrowers found it difficult to compare rates across the 165 licensed moneylenders in Singapore.
"If there is zero transparency, how do I know what is the market rate?" asked Mr Hizam.
To confirm their impressions, he and Mr Hizam tried to apply for a loan through a moneylender, and indeed found it hard to make rate comparisons. The two men, who have a business and finance background thanks to their university education, also found that loansharks preyed on the vulnerable, making false claims to those who may be desperate.
One common claim is that borrowers can use their CPF to pay off their loans. Loansharks may also masquerade as licensed moneylenders.
Mr Hizam and Mr Mohamed were worried about the problem of exploitation. They roped in an IT specialist - 28-year-old Prakash Raja - to build an online platform that allowed borrowers to match their borrowing needs to loans provided by licensed moneylenders.
And so, Onelyst was born. It has sealed more than 30,000 applications over two years, successfully matching about S$8 million in loans from 40 moneylenders to borrowers. Charging moneylenders a fee based on their usage of the platform, Onelyst is already earning more than its operating costs.
Onelyst has also helped in some way to drive credit decisions for moneylenders through data. Many moneylenders still use gut feel to decide which customers are creditworthy, said Mr Mohamed.
For about six months, the team has been working on a second venture, an online platform called Rely. This offers short-term loans to workers who need to purchase gadgets such as mobile phones and laptops.
While these might appear to be luxury items at first glance, many blue-collar workers need such equipment with better technological specifications, to be better at their jobs, or to find new jobs, said Mr Mohamed.
For example, a 38-year-old came through the platform to buy a smartphone. "These guys want to be Uber drivers," said Mr Mohamed, "but they don't have a phone that's GPS enabled."
Another customer wanted a loan to buy a laptop. She didn't qualify for a credit card, so this was the only way she could get an instalment plan to buy the computer.
Said Mr Mohamed: "I met a (customer), a factory worker at Tuas. He just wants to buy an anniversary gift. These people are hardworking. They just want to provide something for their partners."
The platform - which uses funds raised from three external investors - has offered about S$25,000 in loans over about five months.
The fee charged to borrowers varies, but on average it is about 10 per cent for a three-month loan. It has had no defaults in loans, and in fact, customers offer to pay up earlier.
To be sure, these customers still pay a hefty borrowing fee. But they have few viable alternatives.
Rely will lend only to customers with a declared income stream, though the start-up of seven people is already thinking about how to serve the new gig economy, as there are more freelancers who may not have records of Central Provident Fund (CPF) employer contribution, or may have fluctuations in income.
The goal is to be able to create a data-driven credit scoring system that also takes into account seasonal earnings.
The team, which sits at OCBC's fintech lab The Open Vault, now aims to raise up to US$700,000 in fresh funds, and to raise its staff count to 17. It also aims to open an office in Malaysia to cater to similar demands for credit in that market.
"A lot of work has been about helping the rich get richer," said Mr Hizam. "We feel we should give back."