From gov’t salary loans, now also for farmers and fishers, micro and SMEs, overseas Filipinos and private sector employees
[April 6, 2016/ Manila] – More Filipinos can now conveniently avail of loans from the country’s premiere government financial institution as the Land Bank of the Philippines (LANDBANK), together with leading tech company Voyager Innovations, expands the LANDBANK Mobile Loan Saver (LMLS) program beyond its initial market of government employees. LMLS will now cover loans for farmers and fishers, small and medium enterprises, overseas Filipinos and private sector employees.LANDBANK is initially setting aside over P50-billion loan portfolio allocation for the expanded program. The digital and mobile platform from Voyager Innovations will continue to serve as the enabling technology.
“Following the continuous success of our LMLS program, we are scaling up so we can serve more Filipinos through digital technologies. This is in line with our mission of enabling financial inclusion by getting more people to use electronic transactions and aligned with the government’s National Strategy for Financial Inclusion,” said Gilda E. Pico, president and CEO of LANDBANK.
“Digital financial services in the Philippines are off to a big start, led by a progressive partner-advocate in Landbank. We are happy to enable the bank’s extension of these services to help more sectors of the population,” said Orlando B. Vea, president and CEO, Voyager Innovations.
“We congratulate LANDBANK for this expanded program as it is another breakthrough in the shift of consumers in using digital financial services. This is paving the way for a better and more democratized access to the banking system,” said Manuel V. Pangilinan, Chairman of Voyager Innovations, the digital innovations unit of PLDT and Smart Communications, Inc. (Smart).
Expanding loan program for growing sectors
Pico attributed the expansion in loans to consistent efforts to further strengthen its credit support, particularly for key sectors and projects with high development impact.
“Pursuing LANDBANK’s social mandate remains the core of our operations as we continue to pour our resources in favor of the Bank’s priority sectors including farmers and fishers, and microenterprises and SMEs. Alongside our thrust to be financially viable and competitive, we strive to keep our focus in bringing access to credit to the marginalized sectors and other development players,” said Pico.
“Digitizing all these loan processes would bring about further cost and operational efficiencies for faster, cheaper, safer and fully transparent banking transactions and these would ultimately benefit our customers,” she added.
In 2015, LANDBANK’s outstanding loans to its priority sectors reached P384 billion, representing a record-high share of 88.3 percent against the Bank’s loans to all sectors of P434.8 billion. These identified priority sectors comprise of small farmers/agrarian reform beneficiaries and fishers (SFFs) and their associations, microenterprises and SMEs, agri- and aqua-businesses, agri-aqua related projects of LGUs and GOCCs, communications, transportation, housing, education, health care, environment-related projects, tourism, utilities, and livelihood loans.
LANDBANK remains the biggest credit provider to small farmers and fishers and local government units, and the biggest lender to microenterprises and SMEs among government financial institutions.
Financial services now digital
The expanded LMLS program is a result of the stellar performance of the original LMLS service, launched in September 2014 and touted as the country’s first electronic salary loans program. The initial offering was limited to salary loans for government employees.
As of end-March 2016, total loans processed and released under LMLS amounted to over P7.2 billion since launch in January 2015. This corresponds to 49,180 loan applications from government employees under 1,019 agencies. The first three months of 2016 alone, loans processed amounted to more than P1.9-billion, more than 100 percent increase for the same period in 2015. Average loan per borrower is at P147,000.
The service is also benefitting rank and file government employees, as this customer segment accounts for 73 percent of total loans availed to date. Majority or around 59 percent of those who availed of loans through LMLS came from outside Metro Manila and the percentage is fast growing. It is also making inroads in reaching out to the grassroots in 3rd to 6th class municipalities with 21 percent of all loans coming from that lower-income areas as of end-March 2016 compared to just 15 percent by end-December 2015.
An “always-on” and “always-connected” consumer market
The trend from LMLS data also points to an increasingly connected digital market. Because the program provides a 24/7 digital convenience, over 20 percent of loan applications processed were received outside banking hours.
“Most Filipinos have already adopted mobile and digital technologies in their daily lives and it’s natural to extend this to banking services. As people grow more confident in the accessibility, security, and convenience provided by digital channels, we see more uptake of LMLS and similar services,” said Lito Villanueva, managing director and head of fintech, digital inclusion and alliances at Voyager Innovations.
Under LMLS, customers can easily apply and inquire about their loans using their Smart, Sun, Talk ‘N Text – and soon, Globe, TM and ABS CBN Mobile subscribers – and get quick credit decision from LANDBANK regarding their application.
With the positive uptake of LMLS validating an acute consumer market need, Voyager Innovations has also introduced Lendr, the country’s first online marketplace for consumer loans which is expected to launch soon to enable more banks and financial institutions to leverage on digital and mobile technologies.
Voyager Innovations is the digital innovations arm of PLDT and its wireless unit, Smart Communications, Inc. (Smart) focused on delivering platforms for the emerging digital economy. On top of fintech, among the areas of digital life that it is focusing on are digital commerce, digital payments and next communications. For more information, visit www.voyagerinnovation.com. END