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About the author of this op-ed
Pavel Fedorov is the co-founder of Salmon, a fintech startup providing modern credit to Filipino consumers. Salmon is just under two years old and has raised over $60M in equity and debt financing.
Before founding Salmon in Manila, Pavel worked at UBS, Morgan Stanley and Norilsk Nickel. He was also the co-CEO of Tinkoff, a leading Russian digital bank.
Dogs & demons
In one of his many books, Alex Kerr makes a brilliant reference to an ancient Chinese tale. In it, an emperor asks his painter: “What is easy to paint and what is difficult?” The painter responds: “dogs are difficult, and demons are easy”.
In other words, everyday objects are challenging to get right, yet just about anyone can draw a demon.
The same is true of today’s fintech industry: basic solutions to everyday problems, such as inclusive access to credit, are difficult to solve, while creating flashy narratives around the latest buzzword is rather simple. When we founded Salmon just over a year ago, we set out to “draw dogs” by first addressing the most challenging problem – providing better access to credit.
In Southeast Asia, a region home to over 600 million people, about 70% of the adult population is unbanked or underbanked. This gap is particularly pronounced in the Philippines, where a lack of modern financial services has contributed to just 56% of the population using banking services and only a small fraction having access to formal credit. The latter is a particular pain point as the household debt-to-GDP ratio is around 10%, well below the levels of many of the country’s neighbors, such as Thailand and Vietnam.