Posts Tagged ‘Banking’

OFWs demanding more auto loans

May 30, 2008

The overseas Filipino workers’ (OFWs) demand for auto loans is growing at an unprecedented rate. This in turn is grabbing the eyeballs of the banks which are keen on cashing in on this trend. Banks have seen a rise in demand for vans, Asian utility vehicles and sports utility vehicles. This is clearly evident in the statistics which show that about 22-23 per cent of new auto loans are being released by the Philippine National Bank.

 

Today the OFWs are no longer themselves to buying houses and housing appliances but also vehicles which are as good as any other asset. This is accounted to the fact that more OFWs are employed as highly skilled professionals in the developed countries which gives them the financial power to purchase more. Most of these OFWs take up an average loan of about P700,000 with a tenor of three years. These clients usually pay 20 per cent in upfront equity and amortise the rest.

 

It would not be easy to say whether this trend of buying cars and other vehicles is a good idea or not simply because it depends on a number of things like, the capacity to pay, benefits of getting a vehicle, costs of getting a car and other associated risks. In a nutshell, the OFWs should take into account all the features of risks involved before thinking of making an investment like this.

Philippine National Bank opts for APS for MasterCard launch in Europe

May 29, 2008

With the idea of providing international payment card and a better remittance tool, the Philippine National Bank has decided to promote the cashplus prepaid Gold MasterCard throughout its Europe network. This comes after statistics clearly show that the number of Filipinos living in the UK alone has gone up considerably. The weak Philippine economy is heavily dependent on the remittances sent by the overseas Filipino workers (OFWs). This has been realised by the government too which in 2002 appealed to its nationals living abroad to send money back home.

 

The cashplus prepaid is tipped as the cheaper mode of sending money to the Philippines. APS’s cashplus prepaid Gold MasterCard is readily available in the European market and is the most awarded prepaid payment card in Europe. It offers maximum card utility without the credit facility. Its features provide a cost effective and seamless remittance service which appeals to foreign citizens who can also experience card acceptance problems when paying with domestically issued payment cards which are not accepted widely offshore.

 

The PNB customers will benefit from this as they would get to share their money with family and friends on a regular basis. Since the service is expected to go online the subscribers would benefit even more. Additionally, the cashplus prepaid Gold MasteCard will also reduce exposure to fraud. It would eliminate the risk of losses caused by unauthorised borrowings.

 

The bank expects to see more activity with foreign banking partners this year as it sets out with a service model designed to be cost and operationally effective.

Metro Bank expands remittance service

May 26, 2008

In a move to expand its presence in the Middle East, the Metropolitan Bank & Trust Co. (MetroBank) has come to an agreement with a Saudi Arabian bank for a remittance service tie up. The partnership between the National Commercial Bank (NCB), the first bank established in Saudi Arabia and the Metro Bank is expected to increase the penetration of the Metro Bank in Saudi Arabia. According to the agreement, Metro Bank will be fulfilling the operations of NCB’s Philippine bound NCB QuickPay.

 

Metro Bank has a network of over 800 local and international branches, remittance offices and subsidiaries worldwide. In Saudi Arabia it has six partner banks that serve as its remittance offices. Saudi Arabia is one of the biggest sources of OFW remittances to the Philippines. The modes of payment under the agreement are credit to Metro bank accounts, cash pick-up transactions at Metro bank branches and door to door cash delivery.

 

Citibank and Banco Bolivariano to provide new remittance service to Ecuador

May 23, 2008

Citibank and Banco Bolivariano have decided to come together to provide new remittance services to Ecuador. This comes after the Inter American Development Bank found that in 2007, Ecuador received more than $3 bn in remittances from abroad. Citibank and Banco Bolivariano now want to provide a cost effective and easy service to the beneficiaries in Ecuador. Citibank clients can send up to $3,000 per day to Ecuador for a flat fee – as low as $5. There are no additional costs for this transaction. Most funds are available for pick up within 24 hours. Those who do not have an account with Citibank, the solution is quite simple. They just need to open an access account with the bank. The access account is a convenient service that would help the customers to manage and save money and also to send cash instantly back home. Citibank has had operations in Ecuador for 48 years, offering world class products and services and contributing to Ecuador’s overall economic development.

Better banking solutions for better remitting

May 2, 2008

Statistics show that most migrants in the US belong to the lower strata of the economy having limited means and a family to support. These migrants hope to have a better life in the developed countries. They transfer money to their families by accessing their bank facilities but sometimes the whole exercise of remittance becomes so pricy that many find it difficult to avail the facilities.

 

As we turn the world into a global village and encourage the influx of migrant labourers in the developing countries the need to systematise the technological aspects and enabling the migrants to take full advantage of the facilities available becomes important. It is therefore, important to develop cheaper technologies to cut the costs of account-to-account transactions. In this regard, the financial institutions like small banks, credit unions and micro finance institutions have to play an important role. This would help in transforming the remittance clients into clients of financial services. If the financial institutions in countries from where remittances are made and the ones which receive them work in unison the whole remittance business would benefit.

 

One thing that needs special mention is that most remittance recipients belong to the lower strata of the society. These people have limited financial knowledge and are mostly unaware of the investment opportunities they can have by using their money to invest in various sectors- thereby enabling the economy to become stronger. The financial institutions should focus on this and spread awareness.

 

As the global economy wakes up to a dawn of economic independence it becomes exceedingly important to educate the masses of the assets that need to be build to support the economy. In the next blog I’ll talk more on the potential the remittances have and the ways by which the government and the financial institutions can benefit from the whole remittance business.