Land Bank of the Philippines released a testimony that from a million pesos worth of loans extended to enterprising overseas Filipino worker (OFW)-beneficiaries last year, they extended the so-called OFW loans worth P272.8 million as at end-July this year.
Land Bank President and Chief Executive Officer Gilda E. Pico stated that the loans were taken out by a total 425 OFWs who wanted to start their own business and engage in livelihood activities.
This progress came on the heels of an investment survey conducted by the Bangko Sentral ng Pilipinas (BSP) which found that some 5% of OFW remittance beneficiaries set aside a portion of their allotment for investment purposes and not spend them for consumption purposes only.
Pico said the loans were seen to generate jobs for an estimated 1,648 individuals and help perpetuate a cycle in which money earned overseas fuel not just consumption binges but investment activities as well.
Mam Gilda E. Pico stated that the approved loans were to meet working capital requirements for businesses in palay and rice trading, hog raising and fattening, agri-veterinary and poultry supplies as well as for general merchandise.
Land Bank offers a range of financial services including project modules such as bangus in bamboo cages, tilapia culture in earthen pond, hog fattening project and native chicken project. The modules provide OFW-borrowers information on investment requirements and projected monthly income for the said projects.
Bona fide members of the Overseas Worker and Welfare Administration or OWWA who have undergone training may borrow from P300,000 to as much as P2 million at 7.5-percent interest per annum payable within one year or a maximum of seven years, depending on the proposed project.
Eligible projects include those with confirmed market, market contract or service contracts generating income of at least P10,000 every month.
BSP surveys says that the bulk or 97 percent of OFW remittance beneficiaries use their allotment for food, 75 percent for educational purposes, 67 percent for medical expenses and more than 51 percent for the payment of debts.