Smart subsidiary Smart e-Money Inc. (SEMI) has teamed up with the Land Bank of the Philippines (LANDBANK) for a mobile-based incentivized credit, voluntary savings, insurance and livelihood program.
The service will be designed to benefit the roughly 4 million beneficiaries of the government's cash transfer program and around 5 million small farmers and fisherfolks in the agricultural sector.
The program is supported by the United States Agency for International Development (USAID), the Bangko Sentral ng Pilipinas (BSP), the PLDT-Smart Foundation (PSF), the Department of Social Welfare and Development (DSWD), and the Department of Agriculture(DA).
Founders say this makes it the largest public-private partnership for inclusive growth, financial inclusion and financial literacy in the mobile arena.
The program aims to address savings mobilization and micro enterprise development to generate micro savings across the country especially within the basic sector, which largely remains underbanked. It also seeks to reduce vulnerability of the poor through financial literacy, promotion of culture of savings, and micro entrepreneurship.
It offers a socialized interest of only 5% per annum from the usual 20% to 35% annual interest from other micro-finance institutions.
Under the program, recipients of the government’s cash transfer program for the poor can voluntary participate by authorizing LANDBANK to auto-deduct from cash grants for their auto-savings. The amount can vary from P50 ($1.14) to a maximum of P100 ($2.28) per month or P100 or P200 ($4.57) per bimonthly payout depending on the beneficiary’s choice.
LANDBANK, in turn, can provide 50% of the total accumulated future savings of the beneficiary as loanable amount. Based on the beneficiary payout, the amount can either be P1,500 ($34) or P3,000 ($9). This credit facility can be used to avail of a livelihood package that includes a startup phone, a free retailer SIM, merchandising material, selling guide, and an initial P2,500 ($57.10) initial load inventory.
All the income will be stored in mobile savings build-up account enabled by the Smart e-Money platform and linked to the beneficiary’s LANDBANK ATM cash card.