Did you know that you can get insurance for your pet or for your smartphone? You can also get a loan with your farm animal mortgaged. While these may sound odd or bizarre, even, this is not the first time we have very specific financial instruments available in the market. There are financing options available for a wedding, as there are some too for getting electric bikes (e-bikes).
The financial inclusion programs of the government and those in partnership with the private sector appear to be working, with more of us availing of sachet insurance and loan products from various providers. The leap of the ratio of Filipinos who have formal bank accounts through the pandemic has been extended, making the market more interesting to the investors in the finance realm.
Earlier this month, the Asialink Group of Companies had its first virtual financing forum called “FINANCING FOR ALL: An Asialink Group of Companies Virtual Financing Forum!” highlighting the services of three of its financing companies: Global Dominion; SureCycle; and Global Cebuana (a joint venture between GDFI Holdings and Cebuana Lhuiller). During the virtual program, financing products specifically offered to overseas Filipino workers (OFWs), aspiring motorcycle owners, and entrepreneurs with the goal of expanding their businesses, were discussed.
It is a surprise to me though that many Filipinos are still unaware that these financial tools already exist in the country. In Thailand, for example, where household debt to income ratio is higher than the PH’s, people can easily name non-bank financing institutions that can extend mortgage loans and financing options to them. In the PH, however, a vehicle mortgage loan still does come at the top of the options for business expansion. Businesses with vehicles (cars or trucks) can avail of a substantial amount of cash loan with their assets but without the need to surrender their units. For businesses, it is important that they get to continue using these assets to prevent disruptions in their operations. Mortgage loans can also be done using real estate titles and motorcycle registrations.
Interest rates are generally lower with collateral loans, since lenders have the added security of the mortgaged properties of and by their borrowers. This makes collateral loans win-win for both parties. Finance firms continue to exert additional efforts to improve financial literacy and promote the use of finance instruments like insurance and investments, not just credit, to contribute to the betterment of societal financial inclusion. Those who know seem to have better ways in managing their finances.
During “FINANCING FOR ALL”, Global Dominion, represented by Jenelyn Morales, talked about “sangla OR/CR”, SureCycle, represented by Zenaida Soriano, presented motorcycle and tricycle “prenda OR/CR”, while Global Cebuana, represented by Mary Joy Pacheco, shared about loans for OFWs who are about to be deployed abroad and those who are already working outside the country.
“I’m happy that these borrowers also provide more opportunities to our countrymen through the additional jobs they create when they expand their businesses,” Morales shared during her presentation, pertaining to the additional positive effects of lending to the SMEs.