GOVERNMENT-LED Land Bank of the Philippines and Smart e-Money Inc. (SEMI) have partnered for the largest financial inclusion and literacy program for the beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps).
Launched on Wednesday, the Panalo Sikap (Sa Ipon at Kabuhayan Aahon ka Pinoy) program is a mobile-based incentivized credit, voluntary savings, insurance and livelihood program that will benefit over four million 4Ps beneficiaries, and more than 5 million small farmers and fisher folks in the agricultural sector.
Gilda Pico, LandBank president and chief executive officer, considers the program a milestone for concretizing financial inclusion efforts.
“As a bank, it gives us the opportunity to create and develop credit profile and credit score among the poor, by enabling them to transition from being unbanked to becoming a fully banked segment,” she added.
Panalo Sikap 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.
Under the program, recipients of the 4Ps can voluntary participate by authorizing LandBank to auto-deduct from cash grants for their auto-savings. The amount can vary from P50 to a maximum of P100 a month, or P100 or P200 a bimonthly payout depending on the beneficiary’s choice. The auto-savings will be the basis for loan availment.
LandBank, in turn, can provide 50 percent of the total accumulated future savings of the beneficiary as loanable amount. Based on the beneficiary payout, the amount can either be P1,500 or P3,000. This credit facility can be used to avail of a Panalo Sikap livelihood package that includes a startup phone, a free retailer subscriber identification module, merchandising material, selling guide and an initial P2,500 initial load inventory.
Besides their auto-savings, beneficiaries who voluntary participate will pay a maximum amount of P56.61 a month, which is just 4 percent applied to loan repayment of the total deduction. The rest goes into savings. They will also be required to set aside a minimum of 20 percent from their gross revenues per month from the Panalo Sikap livelihood business as additional savings build up.
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.
“We’re excited over this breakthrough service that will benefit those who need it most. It’s an example of how mobile technology can be used in public-private partnership programs in support of social good. With our partners, we expect Panalo Sikap to further narrow the digital financial access divide in our country and to create sustainable livelihood for the 4Ps and agriculture sector beneficiaries,” said Orlando Vea, chief wireless advisor of Smart.
The program is also supported by the United States Agency for International Development, the Bangko Sentral ng Pilipinas, the Philippine Long Distance Telephone Co.-Smart Foundation and the Departments of Social Welfare and Development, and Agriculture.