Landbank’s SMS-based loans breach P1 B

MANILA, Philippines - Over P1-billion worth of loan disbursements has been transacted through the mobile loan saver (MLS) facility of the Land Bank of the Philippines (LBP), which is powered by Smart e-Money Inc. (SMI), six months after it was launched to government employees.

SMI is the digital payments subsidiary of Smart Communications Inc. (Smart).

The country’s fully paperless and electronic salary loan has provided government employees with an alternative source of financing that they can apply for simply by sending a text message using their mobile phones.

LBP president and chief executive officer Gilda E. Pico said that the loan take-up exceeded initial projections. 

“Low interest costs, quick loan processing turnaround time, convenience, and security made MLS uniquely positioned to address the requirements of the target market – government employees,” Pico said.

It offers a low interest rate of 0.83 percent a month, or effectively 10 percent interest rate annually.

Over 7,000 loan applications have already been approved, with average loan size per borrower of P144,000.  In terms of geographical location, Metro Manila residents accounted for more than half of the borrowers, followed by Luzon at 20 percent.  Visayas, and Mindanao accounted for 11 percent each.

SMI president and chief executive officer Orlando B. Vea said that MLS is not only as a viable financing option for our workers in government.

“It is also as an effective tool for digitizing financial transactions across segments in support of the government’s thrust in promoting electronic channels,” Vea added.

SMI and the LBP plan to eventually expand this service offering to include employees of private companies so they too can avail of this fully electronic salary loan.

MLS provides borrowers the quickest credit decision in a speed of a text and fastest crediting of the loan proceeds to their ATM payroll accounts as fast as the next banking day.  This eliminates the average two-week loan processing turnaround time.

Being a fully electronic service, the borrower saves time and cost for submitting and producing numerous income and employment documents to process loan application.  A government employee need not take a leave of absence to submit documents or get the loan check.

The loan system runs under a secure environment as the infrastructure framework of SMI, which strictly follows standards and certification of the Payment Card Industry Data Security Standard (PCI-DSS).