Salary loans made easy to ease ‘financial stress’
Despite efforts made by employers to provide emergency financial access to their employees, 71 percent of Filipinos still do not have money saved for emergency use, and this causing financial stress to some companies.
According to a study conducted by micro-finance firm Cebuana Lhuillier, financial stress caused by untoward stresses accounts for up to 14 percent of salary cost. For a company that has a workforce of 1,000 for instance, this amounts to a deficit of roughly P24 million a year.
Realizing this shared concern among Filipino monthly earners, Cebuana Lhuillier strengthened its partnership with fintech firm Advance to make salary loans easily available to employees, particularly those that are experiencing personal and family crises that need immediate access to money.
“Our goal has always been to provide Filipinos with excellent products that address their financial needs. Cebuana Lhuillier Advance is a great product that benefits both
employers and employees in their journey towards financial wellness,” said Cebuana
Lhuillier President and CEO Jean Henri Lhuillier.
Cebuana Lhuillier one of the leaders in the Philippines’ microfinance industry intensify its commitment to improve the offering of financial access to mainstream consumers, especially those employees that work hard at least eight hours a day, and find it hard to set aside emergency savings due to increasing cost of living and high inflation.
According to Lhuillier with the program offered by his company and Advance, employers need not deal with such losses. The joint microfinance facility is designed to help employers manage their employees’ financial stress and easily help them cope with sudden financial difficulties.
Designed for emergencies and daily needs, Cebuana Lhuillier Advance allows employees to access a portion of their salaries as a revolving line of credit, whenever they need it. In a nutshell, all they need to do is initiate an advance and receive the funds.
By enrolling in the facility, company or business owners will save their employees the hassle of borrowing from banks, which usually takes days to approve or loan sharks who charge exorbitant interest fees.
Another upside is that employers need not tap or use their own funds because Cebuana
Lhuillier Advance shoulders and provides a credit line for employees which is automatically replenished upon repayment. It also promotes the responsible use of credit and ensures that an employee does not take out a loan for more than what he or she can pay back.
Jaime de los Angeles, Advance chief executive officer (CEO) and co-founder believes this new collaboration will help narrow the national credit gap in the Philippines.
Cebuana Lhuillier Advance program is what every employer needs for their employees
who need ready access to cash when an emergency scenario happens. With this innovative loan facility, employers help address the financial burden of their employees, boosting their morale and allowing for greater productivity in the workplace.
The National Strategy for Microfinance envisions a viable and sustainable micro financial market that will help provide poor households, as well as microentrepreneurs with greater access to micro financial services. It calls for a greater role for the private sector and the non-participation of government line agencies in the provision of credit and guarantee programs. Emphasis is on the adoption of market-oriented financial and credit policies to ensure viability and sustainability.
As of 2016, the microfinance industry in the Philippines has grown into a $1.5 billion industry.
According to Bangko Sentral Ng Pilipinas (BSP), it recognizes the helpful role of salary-based, consumer lending schemes in allowing an individual borrower to manage his/her cash flows provided these are granted under sound credit standards and fair consumer practices. The Bangko Sentral likewise encourages competition and transparency to promote efficient and innovative delivery of financial services and fair dealing with customers.