LBP, Smart tap mobile for loans-A A +A
Tuesday, August 12, 2014
TO MAKE loan applications easier and faster, the Land Bank of the Philippines has partnered with telecommunications company Smart Communications to provide a paperless, fully-electronic process for salary loans.
At the celebration of the bank’s 51st anniversary yesterday, the bank and Smart e-Money launched the LandBank Mobile Loan Saver, available to employees of companies that maintain payroll accounts with LandBank.
Considered a first in the country and the world, the Mobile Loan Saver significantly cuts short the loan application process by allowing the applicant to submit an application online and receive notifications on their mobile phone. Loan proceeds are released within three banking days after loan approval and accessed via their existing ATM payroll accounts. Applications can only be done for mobile subscribers of Smart, Talk n’ Text and Sun Celluar.
Rank and file employees can borrow up to P500,000 while officers can avail themselves of salary loans up to P1 million. Terms run from 12 to 36 months.
LandBank president and chief executive officer Gilda Pico said the loan facility offers employees a better option and hopes the convenience it offers will dissuade them from approaching loan sharks and other informal means of borrowing. At an interest rate of .83 percent a month, she said they are widening the access of more people to the formal financial system.
They also hope to cultivate the practice of saving by introducing an auto-debit feature, allowing the account holder to set a minimum of P100 per payday to be set aside from their salaries for savings.
“We at LandBank recognize the needs of our customers, so we see to it that we devise responsive facilities for them. The LandBank Mobile Loan Saver is indeed an innovation which provides greater banking convenience that transforms our service delivery to our clients,” Pico said.
Private and government entities must sign a memorandum of agreement with the bank and submit a list of pre-selected employees containing information needed to determine loan approval.
For a worker to be included in the list, they must be regular employees for at least one year and meet the required monthly net take home pay set by the bank after considering all deductions and amortizations of existing loans, including the loan applied for under the Mobile Saver. They must also have an ATM payroll account with the bank and have no pending administrative or criminal cases and no pending applications for retirement within the loan term.
A total of 243 government and private companies that course their payroll through the bank have signed up for the Mobile Loan Saver, but the bank expects more entities to provide the service to their employees as they continue spreading the word to throughout the country.
Smart e-Money head for payments, innovation, digital ecosystems and global engagements Lito Villanueva believes that with LandBank serving 80 percent of government payroll accounts and serving beyond the agriculture and agrarian sectors, it has a wide reach in the countryside. They will soon be offering the service to the private sector in two weeks.
Villanueva noted that borrowing can either be a boon or a bane, saying it can help provide the needed boost to attain education, health and improving livelihood but could also be destructive if the borrower is constantly paying off debts and staying that way.
He said their service encourages responsible credit and savings, providing clients with a fund for emergencies. MEA
Published in the Sun.Star Cebu newspaper on August 13, 2014.