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Friends, family and online apps: where Filipinos go when they run out of money

MANILA, Philippines – While economic recovery is underway, the social disruption caused by the pandemic over the past two years has been devastating to Filipinos physically, emotionally and financially.

Pandemic-induced lockdowns have shuttered many businesses and industries, causing millions of Filipinos to suffer pay cuts and corporate layoffs, leading to record unemployment. At the same time, purchasing power weakened as prices of essential goods continued to soar amid the financial blows everyone was taking.

Financial stress in families

“We are suffering to find food for our family during the pandemic. Finding money to buy food and for our daily expenses is very difficult,” said Joralyn Fuellas, a 44-year-old online seller.

Mum-of-11, Fuellas revealed that she was often short on money, which led her to borrow from relatives and sometimes even ‘5-6’ moneylenders.

Another, a Gen-Z event planner who preferred to remain anonymous, took a 40% pay cut due to the pandemic hitting the event industry.

“Dahil kulang ang kinikita ko, kinailangan kong maghanap ng ibang paraan para bunuin yung renta ko sa bahay kada buwan,” she said.

Like them, countless Filipinos have experienced this financial stress over the past two years. In fact, Filipinos are the most stressed, anxious and uncertain about their current financial situation, compared to the rest of Asia-Pacific, according to a commissioned report.

“Utang”: a Filipino coping mechanism Toledo IV

“When I run out of money for big and urgent expenses, I usually ask my dad for financial help, but most of the time he just ignores,” said Dan Taojo, a freelancer during the pandemic.

Despite its stigma, Filipinos have always resorted to borrowing or pangungutang to increase their financial needs. He has helped many people survive difficult times.

According to the Governor of Bangko Sentral ng Pilipinas (BSP), Benjamin Diokno, 5 out of 10 Filipinos obtain credit from informal sources of money, including paluwagan, moneylenders, family and relatives.

Here are some of the ways Filipinos borrow money, as shared by our respondents:

  1. Borrow from family and friends

Pro: Lower or zero interest rates. You can also negotiate your repayment terms.

Versus : This can be embarrassing for some and damage relationships.

  1. Night Moneylenders aka “5-6”

Pro: A desperate alternative when friends and relatives can’t lend money

Versus : 20% interest rate and other unfair charges. Some lenders may also become aggressive when they go after lenders through intimidation or public defamation.

  1. Loans from financial institutions like banks

Pro: 100% legit and usually have cheaper interest rates and more flexible payment terms.

Versus : Only 3% of Filipinos who have loans borrow money from banks due to difficult to secure requirements and the fact that many Filipinos are unbanked and have no credit history.

Pinoys and Loan Apps

In the recent BSP report Financial Inclusion Survey41% of Filipino adults obtain loans which they use for food (59.5%), school expenses (38%) and emergencies (32.7%).

This shows that the concept of “pantawid”, whether it is pantawid-gutom or pantawid-gastos, is the main reason why Filipinos resort to loans. Moreover, these urgent needs drive Filipinos struggling with financial difficulties to look for lenders who can offer loans in the quickest and easiest way.

In this regard, a game-changing source of credit is quickly becoming popular among Filipinos who continue to embrace technology in their lives. These are online loan applications.

Viable and accessible to manyThe online loan is available through easy to download mobile apps and can be done with hassle-free loan application requirements.

However, there are still concerns that concern Filipinos, such as privacy and the risk of getting scammed, which our interviewees all mentioned.

Making loan apps work for Filipinos

Friends, family and online apps: Who do Filipinos turn to when they run out of money?

One of the most popular loan apps in the Philippines is JuanMain. Compared to banks, JuanHand promises customers an easier and faster way to process and qualify for loans with just a few clicks.

Made by Filipinos for Filipinos, JuanHand understands the financial challenges Filipinos have faced over the past two years.

True to the spirit of bayanihanJuanhand wants to lend a helping hand to those seeking financial assistance by providing a reliable service that Filipinos can rely on in times of need – one that is secure, fast, and government compliant.

Today, JuanHand is introducing improvements to address common concerns of Filipinos and give them peace of mind when using the service.

The new improved app is more secure. Compliant with the Data Privacy Act 2012, JuanHand does not obtain confidential information from borrowers without seeking their consent, giving clients peace of mind and control over what information they agree to share .

More importantly, JuanHand democratizes access to loans. Filipinos who are unbanked and have no credit history can still avail cash loans from JuanHand by simply downloading their app at the game store and provide a valid ID. They can borrow up to P15,000, with a low daily interest rate of 0.49% and repayable for up to six months to make payment comfortable.

Available 24/7, JuanHand promises cash loan approval within seconds, which caters very well to the urgency of financial needs of Filipinos.

Bayanihan for financial recovery

In addition to responding to urgent needs, JuanHand can also help Filipinos recover financially from the effects of the pandemic. Small businesses and aspiring entrepreneurs can apply for loans to use as capital for a more stable source of income.

In this economic turmoil, the Filipino community needs bayanihan-a collective feeling among the Juans and Jauanas that they can rely on each other for recovery.

The borrowing will remain whenever Filipinos have financial difficulties and as long as the accessibility of financial services is not taken into account. Whatever the reasons for resorting to loans, it is reassuring to know that JuanHand is there to help Filipinos when they are short on resources.