“Fintech” has been a buzzword for the past couple of years. Not only are we in developed countries benefiting from services such as PayPal and venmo; technology is also enabling financial inclusion in many developing countries; Global Mobility Services (GMS), based in Japan, provides auto finance to the bottom-of-the-pyramid (BOP) population in the Philippines utilizing IoT.
In today’s world, 2 billion people are estimated to not own a basic bank account. Financial inclusion has been identified as an enabler for 7 of the 17 Sustainable Development Goals.  In the Philippines, only 8% of the population was banked and borrowed formally while 70% of the population borrowed (including informal measures) in 2014. 
Disrupting auto finance
GMS is a unique fintech player in a sense that it specifically targets financial inclusion in the auto market. The founder of GMS realized the importance of auto finance when he sought to introduce 100,000 electronic tricycles (e-trikes) in Manila to fight pollution under an Asian Development Bank project. The actual implementation suffered because the average tricycle driver could not afford $10,000 and ADB did not finance the purchase. To address the lack of traditional financial services offered to BOP population due to low or lack of credit scores, GMS has developed MCCS, a device that can disable automobiles remotely. Combined with its GPS tracking, the device enables a new method of securing collateral in the case of default; GMS collects the tricycle as collateral when a borrower defaults.
Operating this disruptive finance model
GMS currently purchases motorcycles, adds side cars at the local dealer and offers them as tricycles on an installment loan for 3 years. GMS has partnered with the tricycle operators’ associations of three of the biggest districts in Manila; the association helps with due diligence on applicants as well as offerings new drivers jobs. Each borrower repays the loan on a weekly basis at the local payment centers where they pay utility bills. The payment information is digitally transmitted to the GMS platform. The model is similar to a capital lease; after the fulfillment of the loan repayment, the tricycle driver will gain ownership of the vehicle. When a driver defaults on payment, sales representatives of the company make in-person visits for collection. Ultimately, the company will disable the vehicle to secure collateral in case of default. 
Going forward, the company seeks to establish behavioral credit information based on the driving and payment information accumulated on its platform. Information of each tricycle driver such as default on weekly payment and work etchics (number of trips taken, hours operated, etc.) could prove if a driver is a trustworthy, diligent worker or not; the company pursues utilizing to push traditional lending beyond the current boundaries.
In terms of expanding its current business model, there is significant growth potential given the size of the tricycle market. There are 3.5 million tricycles operating in the Philippines with an annual sale of 1 million vehicles each year.  While the company is offering a disruptive business model utilizing digital technology, many of the challenges the company faces to capture this growth will come from the hardware perspective. First of all, the company will need more software engineers to develop an IoT platform that can accommodate more vehicles and hardware engineers to install the MCCS devices to tricycles. As the number of drivers under the GMS solution grows, the company may need to hire more sales reps to support collection activities. In addition, the company needs to continue developing meaningful partnerships with local transportation operators to achieve expansion into other districts of Manila and other countries. Expansion to other SE Asian nations will require significant effort due to difference in transportation norms and culture. Another challenge is to transition to a lighter balance sheet. The company currently operates accumulating debt and assets (motorcycles) on their balance sheet, which is a significant risk for a startup to take. Once the track record for this service is established, the company should pursue the position of a device/service provider partnering up with financial institutions that are currently reluctant to enter the BOP market.
 World Bank, “Financial Inclusion Overview,” http://www.worldbank.org/en/topic/financialinclusion/overview#1, accessed November 2016
 World Bank, “Company Snapthot-Universal Financial Access 2020; Philippines,” http://ufa.worldbank.org/country-progress/philippines, accessed November 2016
 Global Mobility Service website, http://www.global-mobility-service.com/en/index.html, accessed November 2016
 Ryota Tamaki, “自動車IoTのGMSがケータイ感覚の新リース事業、「クルマではなく仕組みを売る」”, Nikkei Computer (October 13, 2015), http://itpro.nikkeibp.co.jp/atcl/column/14/346926/100800355/, accessed November 2016
 Asian Development Bank, “Proposed Loan and Administration of Loan and Grant Republic of the Philippines: Market Transformation through Introduction of Energy-Efficient Electric Vehicles Project,” https://www.google.com/url?hl=ja&q=https://www.adb.org/sites/default/files/project-document/74734/43207-013-phi-rrp.pdf&source=gmail&ust=1479268334686000&usg=AFQjCNF4S-q32v63Dp-9mhnNFz7FJv05yQ, accessed November 2016