MANILA - Cebuana Lhuillier is banking on the growth of its microinsurance business as stiffer competition among pawnshop operators and the changing habits of millennials shrink the pawn loan business, its CEO said Monday.
Millennials are no longer buying gold jewelry worth pawning, as they prefer to purchase "pandoras" or accessories which do not have much value for pawnshops, said Cebuana president and CEO Jean Henri Lhuillier.
"They go for the look, for the style, but the truth of the matter is there's nothing like buying gold," Lhuiller said.
As Cebuana Lhuillier is focused on the pawning of gold jewelry, this trend among young people has shrunk its pawning business, Lhuiller added.
The company meanwhile forecasts forecasts 15 to 20 percent growth in micro-insurance over the next couple of years, describing it is a future revenue driver.
Lhuiller said microinsurance picked up since the company pioneered it 12 years ago.
"It's grown. We've been able to accumulate close to about 8 million clients," Lhuiller said.
Lhuiller said the company's remittance business meanwhile, is growing, but competition is stiff especially with firms that have strong online presence.
He said proposals to tax the transfer fees for local remittances would negatively affect the volumes of remittance transactions.