ADB puts P1.7 billion in Ayalas’ GCash

ASIAN Development Bank (ADB) president Masatsugu Asakawa has described the bank’s new $30 million (P1.7 billion) loan to Fuse, the lending arm of GCash, as a “crucial advancement in promoting financial inclusion in the Philippines.” In reality, the deal is a troubling use of scarce development money to turbocharge a highly profitable private platform, legitimize a data driven credit regime with weak safeguards, and deepen household indebtedness — while advertising the arrangement as help for MSMEs and women.

The contradiction is obvious even in ADB’s own framing. Fuse is not a fragile microfinance cooperative struggling to reach the unbanked. It is embedded in the country’s dominant “finance super app” and largest cashless ecosystem, backed by Globe, Ayala and Ant Financial.

These are not capital constrained actors. Yet the ADB is deploying a $30 million facility, plus technical assistance, to a platform that is already among the most powerful players in Philippine consumer finance.

This is not presented as a limited response to an emergency credit crunch. By ADB linked accounts, the deal is its first fintech lending facility of this kind in Asean and part of a longer term partnership narrative. That signals a shift in development priorities. A multilateral bank founded to finance public goods — irrigation, flood control, resilient agriculture, public hospitals — is now behaving like a quasi venture investor, using its balance sheet and prestige to underwrite the expansion of a private digital credit platform.

That shift should alarm anyone who still believes development banking exists to correct market failures rather than amplify market winners. If concessional resources are being used to strengthen the moat of the Philippines’ largest cashless ecosystem, ADB is not “crowding in” inclusion; it is crowding out alternatives before they can mature.

The marketing narrative is familiar. ADB and GCash say the partnership will unlock inclusive finance for micro, small and medium enterprises, especially women owned businesses, and help displace the informal “5 6” usury system. In the abstract, cheaper and safer credit is hard to oppose. But the real question is not whether credit can help; it is whether this particular model — app based, algorithm driven, high velocity lending at scale — builds durable enterprise capacity or simply replaces one form of predation with a faster, more efficient, “datafied” one.

Scale

Consider scale and incentives. GCash linked lending reportedly surged by around 65 percent to roughly P362 billion in 2025. This is not a lender struggling to reach borrowers. It is a lending machine already in hypergrowth, seeking additional funding to grow faster. When ADB arrives with $30 million, it is not rescuing an underserved niche; it is pouring fuel into a system whose profitability depends on expanding loan volumes and repeat borrowing.

ADB emphasizes that 60 percent of the facility will go to women owned MSMEs and highlights financial literacy programs for women with limited formal education. But quotas and seminars are not substitutes for enforceable borrower protections and independent auditing. Targets can be met on paper while outcomes deteriorate in practice, especially in fast growing lenders where money is fungible and repayment risk is borne by households, not platforms. Steering women entrepreneurs into short term digital credit without robust safeguards risks turning “inclusion” into a polite label for transferring volatility to those least able to absorb shocks.

Yes, “5 6” is brutal. But replacing informal usury with formalized, app mediated debt is not automatically progress. If constant micro borrowing becomes the default way to fund working capital, fragility is hardwired into microenterprise. Every downturn triggers another loan, and then another. What looks like empowerment becomes a treadmill.

The core issue in the ADB-Fuse deal is not money but governance: the legitimization of algorithmic gatekeeping over credit. GCash relies on GSCORE based assessments using users’ digital behavior and transaction histories. This is marketed as inclusive because it reduces reliance on collateral and paperwork. Yet a development bank should recognize the danger: When creditworthiness is defined by opaque scoring systems, borrowers are not liberated; they are rendered legible to algorithms they cannot question.

Data-driven

Publicly available materials say little about what matters most in data driven credit. What variables feed the score? How are errors corrected? Can borrowers contest decisions? Are people penalized for thin files or behavior correlated with poverty? How is bias detected and mitigated? ADB routinely lectures governments on transparency and accountability, yet here it appears comfortable endorsing a black box system that will shape the economic lives of millions.

The loan is paired with technical assistance — reportedly up to $125,000 — to help Fuse refine products and training. Put plainly, development resources are being used to optimize proprietary lending models. Instead of investing in public interest financial infrastructure — open credit registries, interoperable standards, or independent consumer protection capacity — ADB is helping a private platform perfect its own enclosure.

This is how inclusion turns into dependency. People are included, but on terms set by the platform: its data ecosystem, scoring logic, interface nudges and cross selling incentives. Once inside, exit becomes costly because payments, borrowing history, and access to services are concentrated in a single app.

ADB argues that MSMEs face persistent credit gaps and that fintech speed and alternative data can bridge them. That diagnosis may be partly right, but it does not justify channeling multilateral finance into the country’s largest app. A serious development approach would treat MSME credit constraints as a system problem, not a platform opportunity. It would examine why banks avoid MSMEs and design public mechanisms — credit guarantees, stronger cooperatives, municipal finance, stable demand policies — that reduce risk without privatizing the upside. These interventions are slower and less glamorous, but they are more accountable and resilient.

Instead, ADB has chosen the path of least resistance: partner with the incumbent with the biggest user base and fastest distribution. Yet a sustainable financial system is plural, competitive and governed in the public interest. One dominated by a single super app risks becoming a private utility with weak democratic checks.

Concern

The deal also comes amid global concern over digital lending abuses — hidden fees, coercive design, aggressive collections and data misuse. Against that backdrop, ADB’s stamp sends the wrong message: that attaching the words “MSMEs,” “women,” and “financial literacy” is enough to legitimize aggressive expansion.

Interest caps and regulatory compliance, often cited by proponents, do not resolve the real cost of borrowing once fees, penalties, rollover behavior and collection practices are considered. Nor do they address the power asymmetry between an app that sees everything about a borrower and a borrower who sees only a congratulatory screen and a repayment schedule.

For a bank headquartered in Manila, celebrating a homegrown fintech champion is tempting. But development is not the same as scale, and inclusion is not the same as app penetration. When ADB mobilizes scarce capital to underwrite the business model of a dominant private platform — without equally strong public safeguards or public alternatives — it drifts from development banking toward prestige investing. That is why the ADB loan to GCash looks less like poverty reduction and more like mission drift, financed with moral authority that development banks were never meant to spend so cheaply.

Marxian theory says that in capitalism, big capitalists often utilize the state’s money which is mostly people’s money. This episode reveals a worrying new development in this department: An international banking institution financed by taxpayers of 49 countries (Japan being the biggest) is being utilized by a firm owned by the biggest capitalists here, the Ayalas, and abroad by China’s Ant Group (Jack Ma) and Japan’s Mitsubishi.

I won’t be surprised if GCash competitor GoTyme of the Gokongwei family will soon get huge ADB money. After all the new finance secretary Frederick Go of that clan is in the ADB board of governors representing the Philippines. He can simply argue in the board: If the Ayalas can get ADB money, why not the Gokongweis?

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ADB puts P1.7 billion in Ayalas’ GCash
Source: Breaking News PH