- IOUpay (IOU) partners with I.Destinasi (IDSB) to provide financing opportunities to newly-hired Malaysian federal civil servants (FCS)
- Under the five-year agreement, the companies will collaborate to develop specific product initiatives and marketing programmes for mutual benefit
- IOUpay says the partnership reflects its continued consumer finance diversification, focusing on short-term credit for low-risk customers and leveraging its competitive strengths to capture a greater share of customer lifetime value
- Shares in IOUpay have ended the day up 11.8 per cent at 7.6 cents
IOUpay (IOU) has signed a strategic partnership agreement with I.Destinasi (IDSB) to provide financing opportunities to newly-hired Malaysian federal civil servants (FCS) in various government ministries.
The five-year agreement is the rollout of the company’s first product initiative, which is said to highlight the strategic value of the company’s investment in IDSB.
IOUpay said FCS portfolios are an “optimal fit” for the company’s strategy for sustainable, profitable growth as FCSs have stable, long term employment which makes them the prime target customers.
Under the agreement, the companies will jointly collaborate to develop specific product initiatives and marketing programmes for mutual benefit.
As part of the collaboration, IOUpay will offer short term bridging loans to new employees who are not paid a salary in the compulsory probationary period of three months from commencement.
In Malaysia, employees need to get through the first three months with savings, assistance from friends and family, or unregulated borrowing as mainstream financial institutions will not extend credit before a payslip is issued, notwithstanding verifiable employment status.
Thus, IOU’s loan product will fund the cash flow gap with the initial roll-out to the employees in the Education Ministry, confirming that more ministries will be included in due time.
It is estimated that the product may bring new business volumes of around RM20 million (A$6.6 million) a year.
Additionally, the company will facilitate a 10-year term loan of its new bridging finance to be funded by IDSB’s bank partners, in effect pre-arranging to refinance the shorter-term credit risk taken by IOUpay of the individual borrowers.
The company said the partnership reflects its continued consumer finance diversification, focusing on short term credit for low risk customers and leveraging its competitive strengths to capture a greater share of customer lifetime value.
Shares in IOUpay ended the day up 11.8 per cent, trading at 7.6 cents.