Government-owned financial institution Land Bank of the Philippines, together with tech firm Voyager Innovations, is expanding the Landbank Mobile Loan Saver (LMLS) program beyond its initial market of government employees.
LMLS will soon cover loans for farmers and fishers, small and medium enterprises, overseas Filipinos and private sector employees. Voyager Innovations will continue to serve provide the digital and mobile platform for LMLS.
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, which is more than 100 percent increase for the same period in 2015. Average loan per borrower is at P147,000.
The service is also benefiting 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.
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.
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.
“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.
Manuel V. Pangilinan, chairman of Voyager Innovations, the digital innovations unit of PLDT and Smart Communications, cited the government-led bank for the expanded program.
?[I]t 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,” Pangilinan said.
Agricultural and development lending sector head Cecilia Borromeo said digitizing all the loan processes would bring about further cost and operational efficiencies fully transparent banking transactions.
?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 player,? Borromeo said.
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, micro-enterprises 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 micro-enterprises and SMEs among government financial institutions.