Money anytime, anywhere

It was during a brainstorming session for possible new products in late 2002 that Philippine Savings Bank president Pascual Garcia III broached the idea: Why not a product that provides consumers both credit and a personal loan?

The product called Flexi-Credit Line was launched middle of last year.

"Being the first of its kind, Flexi-Credit wasn’t as easy to sell as a credit card. The concept of a revolving credit card was not easy to understand. It was also important for us to explain to consumers the difference between this product and a term loan," said vice-president and division head for personal loans Eleanor Castaneda.

Last year, the bank received 3,000 applications a month but approved only 1,500. This year, the bank is targeting 3,000 approvals, in part because of a change in the distribution system.

Initially sold solely through the bank’s 120 branches nationwide, the product is now also pushed by agents.

"We had to change the incentives of agents, who were already selling another product of ours targeting the small businessman. By giving the right incentives, we’re hoping the agents will push both products equally hard," said Castaneda.

Product

"We have positioned Flexi-Credit Line as a multi-purpose personal loan that does not require a collateral or a co-maker. Once the line is approved, we do not ask the borrower how he or she is going to spend the money during the one-year life of the line," said assistant vice-president for product management and research Leonardo Disini.

Upon approval, the borrower gets both an ATM card and a checkbook to access a minimum of P30,000 and a maximum of P250,000 (or the equivalent of three months’ salary, whichever is lower). An interest of 2%–which is significantly lower than credit cards’ 3.25% to 6% – is charged only on whatever amount has been availed of or borrowed. Whatever payment amount is made is automatically returned to the credit line, which the borrower can again avail of, without having to clear the purpose of the planned expenditure with the bank.

"We feel there’s a market out there for individuals looking for accessibility and convenience. They don’t have to carry cash all the time. They can withdraw only what they need. Time and geographical boundaries are not limitations. This is truly money anytime, anywhere," said Castaneda.